Why Are Major Bitcoin Traders Amazed Even As BTC Price Drops To $64.3K?

On June 18, the price of Bitcoin (BTC) fell 5.6% intraday to $64,300, the lowest level in more than a month.

The six-day downtrend coincided with macroeconomic data pointing to a slowdown in the US economy, particularly retail sales and employment. Meanwhile, the US Federal Reserve has kept interest rates at their highest levels in two decades. However, resistance in volatile markets indicates future BTC price recovery.

The threat of a US recession, high interest rates have hindered the price of BTC

U.S. retail sales rose a modest 0.1% from the previous month, below economists' consensus of 0.3%, Yahoo Finance reported.

Paul Ashworth, chief economist for North America at Capital Economics, said the data indicated a “shortfall” in second-quarter GDP growth. However, Matthew Luzetti, US economist at Deutsche Bank, believes consumption is returning to a “normal economic pace”.

John Williams, president of the Federal Reserve Bank of New York, described the US economy and labor market as strong and expects “inflation to moderate in the second half of this year.” Williams argued that the Fed's current policy is weighing on the economy, but the central bank “needs more information” before considering interest rates.

A high interest rate environment favors fixed income investments and is detrimental to Bitcoin. The S&P 500 index's June 18 rally to record highs, driven by a handful of tech companies, weighed on investor interest in bitcoin.

This situation is even more alarming when combined with the fact that US spot bitcoin exchange-traded funds (ETFs) experienced $562 million in losses in three days, according to data from Farside Investors.

Investors can determine market sentiment by measuring the long-to-short ratios of major traders. By consolidating positions in perpetual and quarterly futures contracts, professional traders can gain a clearer understanding of whether they are leaning toward bullish or bearish positions.

Binance's major traders' long-to-short ratio increased to 1.52 from 1.32 on June 13, indicating strong interest in long positions despite Bitcoin's failure to sustain the $68,000 support level. On OKX, the indicator rose to 1.78 from 1.65 on June 13, suggesting that Bitcoin prices have fallen below $67,000 as whales and market makers add net lengths.

Bitcoin whales and miners are cautiously optimistic.

Analysts should examine the balance between calls (buys) and puts (sells) to determine whether traders are caught off guard and currently holding short positions underwater. The growing demand for put options shows that traders are particularly focused on neutral-to-carry pricing strategies.

Bitcoin options data from Deribit shows that demand for put options has declined since June 14, with call instruments more than doubled in favor. This shows that Bitcoin whales and market makers did not expect a price drop and were optimistic during the dip.

In addition to ETF and derivatives traders, Bitcoin miners generate an average of 3,150 BTC per week. Miners can take more than $203 million off the market every week, so tracking the outflows is critical to understanding trader sentiment.

Related: Bitcoin Price ‘Cluster' Hints For More Downside: Is BTC About to Lose 64K Support?

Since June 14, Glassnode mining has remained well below 0.8, indicating that selling pressure has subsided. This trend contrasts with the period from May 30 to June 13, when the index often neared or exceeded 1.0, meaning miners sold more than the average of the previous 365 days.

Given that Bitcoin derivatives traders held a bullish position during the dive to $ 64,300 on June 18, while the spot ETF offered strong exits, there is no reason to expect more BTC price pressure, considering that the current macroeconomic setup suggests that the Fed may reduce. Year-end rates.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.