Macro fears cap bitcoin up despite 3-week high
Main Receptors:
Bitcoin rose above $90,000, but options data showed traders are showing a risk aversion.
The exit of bitcoin spot ETFs and low consumer demand suggest that investors will continue to be wary of near-term gains.
Economic instability will cause Bitcoin's price to rebound
Bitcoin (BTC) jumped above $90,000 on Saturday, with traders questioning whether there is enough momentum to return to the $95,000 level for the first time in seven weeks.
With the S&P 500 trading 1.3 percent below its all-time high, investors were concerned about worsening economic conditions, especially after electric-vehicle automaker Tesla ( TSLA US ) reported disappointing sales.
The tech-heavy Nasdaq index failed to regain the 26,000 level as the sector was torn between concerns over artificial intelligence and weak US labor market data.
According to Bloomberg, Tesla's total vehicle deliveries totaled 418,227 units in the fourth quarter, down 15 percent from 495,570 a year ago. Tesla shares fell 2.5% on Friday and remain 12.2% below their all-time low.
In contrast, Chinese technology firm Baidu ( BIDU US ) shares rose 15 percent, with modest optimism emerging from China. The company filed for an IPO on the Hong Kong stock exchange to spin off its artificial intelligence chip unit Kunlunxin.
The tech sector clearly underpins the Nasdaq's 20% gain by 2025, but traders say valuations are overstretched.
BTC has reached a multi-week high, but the gains remain positive
Demand for BTC bullish positions remained flat on Saturday, despite Bitcoin rising to its highest level since December 12.
Over the past 20 days, Bitcoin's price has remained within a relatively tight 6% range, which has caused investors to worry as it has been lagging above resistance.
Bitcoin futures base rate stalled below the neutral threshold on Friday, indicating a lack of confidence among bulls.
The current 4% annual premium on spot markets reflects traders' concerns that US tariffs could weigh on the broader economy. On the positive side, the $85,000 retrial on December 19 wasn't enough to spark a broad sentiment.
The lack of interest in rich bitcoin spots may be linked to selling pressure in bitcoin spot exchange-traded funds (ETFs). As of December 15, these products have registered a net flow of more than 900 million dollars.
Meanwhile, gold ETFs posted seven straight weeks of net gains, which could signal weaker confidence in US economic growth as concerns over the government's fiscal stance mount.
Suspicion remains around $90,000, but no panic.
Following the 3.2% gain in two days, it is important to examine the activity in the BTC options market to determine whether Bitcoin whales and market makers have turned bullish.
Bitcoin has placed trade (sell) options at a premium on Saturday as professional traders demand high compensation for low price exposure.
Although the indicator remains in a neutral -6% to +6% range, it is still far from turning bullish, which is typically the case with inverse call skew. BTC derivatives indicate uncertainty near the $90,000 level, although there are no obvious signs of excessive fear.
Related: No, Whales Are Not Collecting Large Amounts of Bitcoin: CryptoQuant
Inflation remains a concern as the US government plans to roll out tax incentives to stimulate the economy. Bond futures markets have only a 16% chance that interest rates will fall to 3.25% or below in April, according to the CME FedWatch Tool.
For now, Bitcoin derivatives traders do not expect further price increases, and confidence may slowly rebuild following a month-long consolidation near $89,000.
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