Bitcoin briefly touched the $72,000 resistance level on June 7 before experiencing a sharp decline to $69,000. This drop, combined with two key indicators, including the long-to-short metric of top traders on exchanges, suggests a decrease in optimism among Bitcoin (
BTC
) investors. The question arises: is the current Bitcoin bull market coming to an end, at least in the short term?
On the same day, Bitcoin and gold both saw a decline as the S&P 500 index reached a new all-time high. This record was fueled by a substantial increase of 272,000 nonfarm payroll jobs in May, surpassing the previous month’s figure. A robust labor market typically benefits credit and consumption, ultimately supporting publicly listed companies. The relationship between job creation and corporate earnings is especially significant, with wages rising by 0.4% in May and prime-age worker participation reaching a 22-year high at 83.6%. Despite a dip in U.S. consumer sector stocks, the tech sector managed to offset this decline.
Economist Robert Sockin from Citi warned of the risk of a recession if the U.S. Federal Reserve maintains interest rates above 5.25%. However, recent U.S. unemployment data, standing at 4%, does not indicate an imminent risk. Investors are currently pricing in a 51% chance of a rate cut by September, down from 69% the previous day.
Bitcoin, gold, and U.S. Treasury yields were all affected by macroeconomic data and reduced expectations of interest rate cuts. While Bitcoin’s price declined alongside gold and fixed-income assets, the stock market remained resilient. This can be attributed to the significant cash reserves held by the largest U.S. companies, which can be deployed for buyback programs or invested in money-market funds.
In the realm of Bitcoin trading, top traders have shown a decrease in bullish sentiment following the rejection of the $72,000 resistance level. Data from BTC futures markets reveals a decline in the long-to-short ratio among professional traders. Despite some concerning trends, retail trader demand for stablecoins in China has shown a modest increase, indicating a more optimistic outlook among smaller investors.
Overall, while there are signs of caution in the market, there is still some support for bullish bets on Bitcoin. The $69,000 support level may prove to be resilient, suggesting that a potential turnaround in sentiment among traders could be on the horizon.