Important takeouts:
Bitcoin Zilla emphasizes that billions of dollars will be settled in the ether and undermines convictions in support of $108,000 among key players.
Bitcoin derivatives show an increased liquidation risk, with a leveraged redlong of $390 million below $107,000.
Bitcoin (BTC) has been trading within the narrow 2.3% range since it fell sharply from $112,500 on Friday. The lack of momentum could be partly due to the regulated market, which is closed on US Labor Day holidays, but the Bitcoin derivatives market shows a lack of confidence in its support level of $108,000.
Bitcoin Monthly Futures Annulized Premium is currently at 7%, which is in the range of neutral to 5% to 10% compared to the previous week and is flat. The indicator last showed signs of bullishness following a $117,000 rally on August 24, after a speech by US Federal Reserve Chair Jerome Powell raised hopes for less restrictive monetary policy.
Bitcoin prices are being separated from gold amid whales’ sales pressure
The price of Friday has been up 2.1% since Friday, and the sentiment of Bitcoin traders has been exacerbated as cryptocurrencies fell 12.5% from their all-time high on August 14th. Investors have questioned whether the recent recession reflects broader risk aversion or Bitcoin-specific factors, particularly after longtime holders have decided to liquidate some of their positions.
Bitcoin Zilla, which previously held for over five years, swapped its funds into ether (ETH) on August 21, selling $4 billion worth of Bitcoin through decentralized exchange lipids. According to Nicolai Sondergaard, research analyst at Crypto Intelligence Platform Nansen, the movement highlights “rotation” as Altcoins appear to benefit from expanding corporate accumulation.
Bitcoin Put (selling) options trade at a 7% premium compared to call (purchasing) equipment, according to Deribit Skew metrics. This type of imbalance is common in bear markets, with this indicator exceeding the neutral 6% threshold of the past week. Whales and market makers show little confidence that a support level of $108,000 will be retained.
A $127 million net outflow from the US on Friday spots Bitcoin exchange trade funds. Whether the sale is attributable to broader macroeconomic uncertainties or inherent weaknesses in Bitcoin, traders are increasingly concerned as reflected in BTC derivatives. Meanwhile, the yield on UK government bonds in 2020 has skyrocketed to the highest level since 1998.
Related: Is Warren Buffett’s Cultivation Cash Pile a Bad Sign for Stocks and Bitcoin?
Investors demand higher returns to hold government bonds, signaling expectations of either stronger inflation or national currency depreciation. In either case, a rise in long-term yields increases the financing costs of future debt rollovers and new issuances. Even speculation about such risks could further strain the public’s finances and spill over the eurozone due to ongoing fiscal concerns.
Coinglas estimates that if Bitcoin’s price falls below $107,000, $390 million in bullish leveraged positions faces liquidation. Still, Bitcoin’s upcoming outlook could be dependent on US job market data on Friday. The potential rise in unemployment could serve as a positive catalyst for risk-on assets as it increases pressure on the Federal Reserve to accelerate interest rate cuts.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
