Five days after falling below $60,000 on July 4, Bitcoin (BTC) professional traders’ morale dipped to its lowest level in two weeks, according to the long-to-short metric. This suggests that whales and market makers are hesitant to open bullish leverage positions, even as the Bitcoin price fell to a four-month low.
This lack of enthusiasm is concerning, especially since Bitcoin was trading near $72,000 on June 7, leading some analysts and traders to suggest that the current cycle may have already peaked.
Are 25% Bitcoin price corrections the norm?
Source: DCinvestor
Digital art collector and digital assets advocate DCinvestor argued that 25% Bitcoin price corrections from intra-cycle highs are normal and do not signify the end of the bull market. Despite similar price fluctuations occurring in the past, repeated failures to break above $72,000 since March 24 suggest a diminished buying interest. Additionally, other metrics, like the search trends for “Buy bitcoin,” indicate that retail interest has waned over the past four months.
Search trends for “buy bitcoin” term. Source: Google
Traders are debating whether the recent correction can be attributed to the FUD caused by the German government selling over $3 billion of previously seized coins and the impending distribution of assets from the failed exchange Mt. Gox’s bankruptcy estate after 10 years. Mt. Gox’s Bitcoin repayments are nearing $8 billion, although the timing remains uncertain, and creditors might choose to hold rather than sell on the market. Meanwhile, over 50% of the 50,000 BTC from the German government wallet had already been transferred to exchanges by July 9.
The S&P 500 index’s rise to a new all-time high on July 9 also contributes to the negative sentiment towards cryptocurrencies. Several large-cap stocks, including NVidia, Taiwan Semiconductor, Eli Lilly, Broadcom, Applied Materials, Meta, Qualcomm, ASML, and Netflix, have gained 40% or more year-to-date in 2024. This stark performance contrast makes investing in Bitcoin, which is up only 30% so far in 2024, less attractive.
Furthermore, gold is trading just 3% below its all-time high…
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