Key takeaways:
- BTC futures and options show stable investment sentiment despite the recent price correction.
- Macroeconomic uncertainty and the escalating US trade war reduce the odds of Bitcoin retesting its recent all-time high.
Bitcoin (BTC) fell 5.5% between May 27 and May 30, retesting the $104,000 level for the first time in eleven days. Despite the correction, professional Bitcoin traders remained optimistic, as reflected in BTC derivatives data and continued demand for stablecoins in China.
BTC has been moving in close alignment with US government bonds, suggesting that macroeconomic factors are likely behind the weakness following the all-time high of $111,970 on May 22. The trade war led by US President Donald Trump has made investors more risk-averse.
US Treasury 10-year yield futures (left) vs. Bitcoin/USD (right). Source: TradingView/Cointelegraph
Yields on 10-year US Treasury bonds peaked at 4.60% on May 22 but have since dropped to 4.42% as investors sought the safety of government-backed assets. Falling yields suggest traders are accepting lower returns, indicating increased buying activity. This shift coincided with Bitcoin’s $7,900 decline from May 22 to May 30.
Bitcoin 2-month futures annualized premium. Source: laevitas.ch
The Bitcoin futures premium is currently at 7%, unchanged from May 27, when BTC traded near $110,000. This level falls comfortably within the neutral 5% to 10% range, making it unlikely that futures were the cause of the correction. More importantly, there’s no evidence that excessive leverage contributed to the all-time high on May 22.
Bitcoin futures aggregate open interest, BTC. Source: CoinGlass
The aggregate open interest in BTC futures, equivalent to 700,000 BTC on May 30, was only 2% below the level observed on May 27, indicating no significant drop in traders’ appetite for leveraged positions. In fact, liquidations of bullish BTC futures positions totaled $323 million over four days, less than 0.5% of total open interest.
Bitcoin 30-day options 25% delta skew (put-call). Source: laevitas.ch
The Bitcoin options market also showed a limited reaction to the $104,000 retest. The 25% delta skew remains within the neutral range of -6% to +6%, indicating that traders are pricing equal probabilities for upward and downward movements. Typically, when whales and market makers expect further downside, the metric rises above 6% as put (sell) options begin to trade at a premium.
USDT Tether (USDT/CNY) vs. US dollar/CNY. Source: OKXTether (USDT) has been trading at a minor 0.4% discount in China relative to the official USD/CNY rate, suggesting that Bitcoin’s decline has not triggered a broad exit from the crypto market. This points to a rotation into stablecoins, likely as investors await reduced macroeconomic uncertainty.
The strong short-term correlation between US Treasurys and Bitcoin, combined with stable BTC derivatives metrics, shows that professional traders are not alarmed by the pullback to $104,000. From a technical perspective, the recent correction does not signal reduced interest from traders despite the $347 million net outflows from the spot Bitcoin exchange-traded funds (ETFs) on May 29.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
