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Bitcoin (BTC) has demonstrated notable resilience, surging by 11% between April 20 and April 26 and holding firm near its two-month peak of $94,000. This upward momentum comes on the heels of encouraging signals from the Trump administration regarding a potential easing of import tariffs, coupled with robust corporate earnings reports that have buoyed broader market sentiment.
Investor confidence in the leading cryptocurrency appears to be strengthening, evidenced by a record $3.1 billion in net inflows into spot Bitcoin exchange-traded funds (ETFs) over a mere five-day period. This significant capital injection underscores growing institutional and retail appetite for direct exposure to Bitcoin.
However, a closer look at key derivatives indicators paints a more nuanced picture. A prominent BTC perpetual futures metric has flashed bearish signals, casting a shadow of doubt over the immediate feasibility of breaching the coveted $100,000 mark. Perpetual Bitcoin futures, a favorite among retail traders due to their tight correlation with spot prices, exhibited a sharp negative funding rate on April 26. This is an unusual occurrence during bull markets, typically indicating stronger selling pressure as those betting against Bitcoin are willing to pay a premium to maintain their short positions. While this metric has shown volatility since mid-April, the recent negative spike suggests a potential shift in short-term sentiment.
Interestingly, this bearish leverage demand in perpetual futures contrasts with activity in monthly Bitcoin futures contracts, which are favored by professional traders due to their predictable leverage costs. The two-month Bitcoin futures premium, or basis rate, climbed to a seven-week high on April 26, signaling increased interest in bullish positions among this cohort. Although the current 6.5% premium remains within a neutral range, its upward trajectory suggests a divergence in sentiment between retail and potentially institutional traders.
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While some of Bitcoin’s recent strength can be attributed to the S&P 500’s impressive 7.1% weekly gain, the correlation between the two assets has notably weakened. The 30-day correlation now stands at a modest 29%, a significant drop from the 60% observed between March and mid-April. This suggests that Bitcoin is increasingly carving out its own path, less tethered to the performance of traditional technology stocks. Furthermore, gold’s recent inability to sustain its bullish momentum after reaching an all-time high has been interpreted by some analysts as bolstering Bitcoin’s narrative as an independent digital asset.
Despite the cautious signals emanating from the perpetual futures market, the sustained accumulation of Bitcoin through ETFs by institutional players could provide the necessary impetus to propel its price higher. The current disconnect in leverage demand highlights the complex and often contradictory forces at play in the cryptocurrency market as it navigates a landscape of evolving macroeconomic factors and shifting investor sentiment. Whether the $100,000 target remains within reach in the near term hinges on the interplay between these bullish and bearish indicators.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
