Bitcoin (BTC) price continues to battle at the $24,000 resistance and the price rejected there on Aug. 10, but the rejection was not enough to knock the price out of the 52-day-long ascending channel. The channel has a $22,500 support and this bullish formation suggests that BTC price will eventually hit the $29,000 level by early October.
Bitcoin derivatives data does show a lack of interest from leveraged longs (bulls), but at the same time, it does not price higher odds of a surprise crash. Curiously, the most recent Bitcoin downturn on Aug. 9 was accompanied by a negative performance from U.S.-listed stocks.
On Aug. 8, chip and video graphics card maker Nvidia Corp (NVDA) announced that its 2Q sales would present a 19% drop compared to the previous quarter. Moreover, the U.S. Senate passed a bill on Aug. 6 that could negatively impact corporate earnings. Despite freeing $430 billion to fund “climate, healthcare and tax,” the provision would impose a 1% tax on the stock buyback by publicly traded companies.
The high correlation of traditional assets to cryptocurrencies remains a huge concern for some investors. Investors should not be getting ahead of themselves even if inflationary pressure cedes, because the U.S. FED monitors employment data very closely. The latest reading displayed a 3.5% unemployment typical of overly heated markets, forcing the monetary authority to keep raising interest rates and revoking stimulus debt purchase programs.
Reducing risk positions should be the norm until investors clearly indicate that the U.S. Central Bank is closer to easing the tighter monetary policies. That is precisely why crypto traders are following macroeconomic numbers so closely.
Currently, Bitcoin lacks the strength to break the $24,000 resistance, but traders should study derivatives to gauge professional investors’ sentiment.
Bitcoin derivatives metrics are neutral-to-bearish
The Bitcoin futures annualized premium measures the difference between longer-term futures contracts and the current spot market levels. The indicator should run between 4% to 8% to compensate traders for “locking in” the money until the contract expiry. Thus, levels below 2% are extremely bearish, while the numbers above 10% indicate excessive optimism.
The above chart shows that this metric dipped below 4% on June 1, reflecting traders’ lack of demand for leverage long…
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