Bitcoin bears gained dominance over bulls and caused BTC price to fall to below $59,000, hitting a 24-hour low of $58,402. The market sentiment has dipped from 74 (greed) last week to 30 (fear) today, indicating the severity of negative sentiment in the crypto market.
Bitcoin dominance has dropped to 53.2% against altcoins, sparking speculation of altseason. However, the altcoin season is not here yet as altcoins are still oversold despite a rebound in the last 24 hours.
Bearish Sentiment Among Derivative Traders
Bitcoin remains bearish for derivatives traders as implied volatility (IV) in all terms and trading volumes indicate a drop amid uncertainty. Implied volatility measures the expected price movements in the coming days based on an option’s price and trading.
Source: The Block
Options traders were bearish on BTC for the last few weeks as spot Bitcoin ETFs saw consecutive outflows. As per CoinShares, digital asset investment products saw $1.2 billion outflows in the last 2 weeks. Institutional investors sold $690 million in Bitcoin and Ethereum, as Solana and XRP looked like better alternatives.
CoinGape was first to warn about a potential BTC price drop to $55,000-$57,000. As per the largest derivatives exchange Deribit, over 108K BTC options of notional value of $6.7 billion are about to expire on June 28. With a put-call ratio of 0.51 and the max pain point at $57,000, Bitcoin price is more likely to remain under selling pressure.
There are many reasons why Bitcoin correction became worse. It includes upcoming Bitcoin and Bitcoin Cash distribution from beleaguered exchange Mt. Gox in July, Germany’s government selling from seized $3 billion bitcoins, bitcoin miners selling $2-3 billion amid financial crunch, and whales selling BTC worth billions. German govt today sold 900 million BTC worth $54.90 million.
Analysts, such as Markus Thielen from 10X Research, have highlighted a double top formation in Bitcoin chart, a technical indicator signaling a further downtrend. He predicted Bitcoin could crash to $50,000 due to double top pattern formation. The key support level is at $60,000.
Investors are pessimistic about Fed rate cuts this year despite Wall Street banks’ prediction of rate cuts starting in September. Uncertainty surrounding Fed monetary policies weighed heavily on Bitcoin’s recent performance. Traders brace for US PCE inflation this week and other macroeconomics events next week such as ISM manufacturing, Fed Chair Powell’s speech, the FOMC meeting release, and jobs and unemployment rate.
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Current Bitcoin Market and Outlook
BTC price currently trades at $61,389, up 1% from the 24-hour low of $58,601. Trading volumes jumped 31% in the last 24 hours as investors and whales bought the dip. Bearish sentiment among BTC spot and derivatives traders continues to persist ahead of the U.S. PCE inflation data and monthly options expiry.
Investors contending with uncertainty related to inflation, interest rates, and geopolitics are already bracing for volatility and uncertainty. Analysts do not see any significant movement until the month’s end. Moreover, the third quarter has been historically weak for bitcoin and crypto markets.
Bitcoin futures and options open interest increased in the past 24 hours, as per CoinGlass data. BTC futures OI jumps to 2% to above $32.84 billion, while options show a marginal increase in open interest as put bets were placed for $60,000 in the last 24 hours.
Also Read: Bitcoin Bullish Flag Pattern And On-Chain Data Signal Reversal To $88K Soon
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Varinder has 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
