On October 2nd, the price of Bitcoin (BTC) surged 5.5% to $28600
On October 2nd, the price of Bitcoin (BTC) surged 5.5% to $28600.
However, due to the highly anticipated launch of Ethereum Futures ETFs not generating significant trading volume, the cryptocurrency with the largest market value has lost momentum.
Although the recent recovery of the upper limit of the price range may be encouraging to investors, recent statements by Federal Reserve representatives have reiterated concerns about an imminent economic recession.
Bitcoin showed short-term strength, maintaining support at $27200 on October 3rd, and then rising above $27500 on October 5th.
However, three key trading indicators indicate a lack of support.
These indicators include spot market trading volume, derivatives, and confidence in the approval of spot ETFs compared to special currency.
Macroeconomic forces bring downward pressure on Bitcoin prices
On October 2nd, Michael Barr, the Federal Reserve's Vice Chairman in charge of regulation, announced in New York that he expected economic growth to slow to "below potential" due to the restrictions on economic activity caused by rising interest rates.
He also pointed out that the comprehensive impact of current monetary policy has not yet been demonstrated.
According to the CMEFedWatch tool, the market is currently concerned about the possibility of the Federal Reserve hitting interest rates again in 2023.
According to the data of the US Treasury Department, on October 3, the real yield of the 10-year US treasury bond bonds adjusted for inflation reached 2.47%, the highest level in nearly 15 years.
This development to some extent explains the US dollar index (DXY) reaching its highest level in 10 months.
In addition, Reuters reported that due to its "economic resilience", the United States has become a relatively more attractive investment destination, with significant growth compared to Europe and China.
Bitcoin trading data shows a decrease in leverage for long position activities
The trading price of monthly Bitcoin futures contracts is usually slightly higher than the spot market, indicating that short sellers are demanding more funds to delay settlement.
Therefore, the annual trading of BTC futures contracts is usually 5% to 10%, which is called futures premium and is not unique to the cryptocurrency market.
BTC futures premium trading is below the neutral threshold of 5% and remains within the neutral to declining range.
This indicates insufficient demand for leveraged long positions.
In addition, the spot trading activity of traditional exchanges has dropped to its lowest level since the end of 2020, indicating a decrease in the participation of institutional investors.
It is worth noting that the decline in trading volume can be attributed to major US trading companies such as JaneStreetGroup and JumpTrading moving away from the cryptocurrency market before May 2023.
Bloomberg reported that,The main reason for the decrease in trading volume is the change in "high regulation", which reduces the attractiveness of the market to institutional investors.
Investors' expectations for spot BTCETF have decreased
One of the factors supporting Bitcoin's 68% rise in 2023 is the prediction that the US Securities and Exchange Commission will approve Bitcoin spot ETFs.
However, despite multiple delays by regulatory authorities, the recently launched Ethereum futures based ETF on October 2nd has shown sluggish demand.
In addition, despite the court's favorable ruling to convert the grayscale Bitcoin Trust Fund into a Bitcoin spot ETF, its trading price is still 19% lower than its holdings of Bitcoin.
This data indicates a lack of confidence in the approval of spot ETFs for special currency, as investors can choose to redeem their stocks at face value after conversion.
In the end, Bitcoin was unable to overcome the resistance level of $28500, and the Federal Reserve representative warned of upcoming economic pressure.
Therefore, the prospects for overcoming this resistance in the short term do not seem optimistic.
Follow Guage, share a full load of dry goods, cutting-edge hot topics, and first-hand information every day, and take you easily through the bull and bear journey!
#BTC # # Cryptocurrency#
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
