In a recent announcement, Federal Reserve Chair Jerome Powell decided to pause interest rate hikes, despite Bitcoin options data indicating possible downside risks, including a drop in BTC price to $25,000. Bitcoin’s price has been stuck below $26,300 since June 10, and in a contrasting performance, the Nasdaq tech stock market index gained 13.6% during the same period.
The demand for US government bonds seems to be declining, with the yield on two-year US Treasurys increasing from 3.80% on May 4 to 4.68% on June 14. With over $850 billion in new bills expected to be issued between June and September, the market projects even higher borrowing costs for businesses and families. Despite this, investors appear to be drawn to tech companies and simultaneously avoiding Bitcoin.
CoinShares’ recent “Digital Asset Fund Flows Report” revealed that the sector’s investment product outflows totaled $88 million in the week ending June 10. The present outflows amount to $417 million over the last eight weeks. As interest rate hikes don’t appear to be slowing down, analysts link this trend to monetary policy considerations, urging investors to be cautious.
In the past two weeks, Bitcoin has struggled to regain the $27,500 support level, but the upcoming $600 million weekly options expiry on June 16 could complicate matters. Bulls may have been overly optimistic, as they focused their bets above $27,000 after Bitcoin’s price rose by 8% on June 6, wiping out losses that took BTC down to $25,400.
Based on the 0.73 put-to-call ratio, bears are in a stronger position, potentially causing a sharp correction below $25,000. It is vital for traders to anticipate these movements and keep an eye on the weekly options expiration on Friday.
In conclusion, although the Federal Reserve appears to be easing policies related to interest rate hikes, Bitcoin still faces potential downside risks that could impact its market value. Investors should monitor market trends and stay informed about the factors influencing price changes in the cryptocurrency landscape.
Source: Cointelegraph
