- The price of Bitcoin declines as Wall Street becomes more risk-averse.
- Since April 2022, leveraged funds’ view about Bitcoin futures has never been more pessimistic.
The price of one bitcoin dropped to $28,346 on Thursday, reaching its lowest level since June 21 and maintaining a 1.6% decline from the previous day. This negative trend is a reflection of Wall Street’s increasing risk aversion, with U.S. stocks falling as a result of renewed concerns about the banking industry and probable Chinese economic slowdowns.
According to a recent report by the U.S. Commodity and Futures Trading Commission (CFTC), leveraged companies including hedge funds and commodity trading consultants have shifted their positions on Bitcoin futures to the downside. The largest differential since April 2022, according to Lawrence Lewitinn of the crypto analytics firm The Tie, is that two-thirds of their positions are short while just one-third are long.
It appears that a macroeconomic environment that is unpredictable and the rising yields on US government bonds are causing skilled traders to worry. Despite positive developments in the cryptocurrency sector, such as the introduction of futures-based Ether (ETH) ETFs and PayPal’s stablecoin launch, the market is still unresponsive.
Even with big financial institutions adopting blockchain technology or growing interest in ETH ETFs, the cryptocurrency market exhibits decreased volatility and volume, according to David Lawant from FalconX. He highlighted once more the necessity to keep an eye on any potential effects that broader macroeconomic issues may have on the cryptocurrency market.
It’s interesting to note that the recent volatility of Bitcoin follows the meme coin SHIB’s habit of peaking following big increases. The coin, called the “dogecoin-killer,” saw a 20% increase in value in early August as a result of the excitement surrounding the layer 2 Shibarium debut. However, due to Shibarium’s rough start, its value has dropped by 18% since August 12 and has fallen by 9% just recently. According to Coinglass data, the financing rates for SHIB’s perpetual futures on Binance have drastically decreased, pointing to a pessimistic trend in leverage.