Bitcoin (BTC) is currently trading marginally above $64,000, having challenged it throughout the most of the morning's trading in Asia.
According to Jun-young Heo, a derivatives trader at Singapore-based Presto, "unexpectedly higher U.S. treasury yields, a stronger dollar, and geopolitical risks in the Middle East weighed down on crypto markets."
Yeo claimed that the futures market was likewise reflecting the risk-off attitude, as seen by some exchanges' negative financing rates and the "plunging" three-month basis yields near 10%.
"Short-term put options are more expensive than call options for both BTC and ETH," Heo went on to say.
Almost evenly divided between bullish and bearish futures bets, $31.1 million in long contracts were liquidated and $36.49 million in short positions were redeemed during the past 12 hours.
According to Justin d'Anethan, head of business development at Keyrock, a Hong Kong-based cryptocurrency market maker, "it appears investors have been unable to break all-time highs but remain unwilling to completely turn bearish either."
"It is a difficult environment to navigate with a series of positive crypto-centric catalysts," he said. However, the macro environment appears to be controlling all risk assets, with more hawkish rate expectations in response to unexpectedly strong inflation and, of course, the escalation of Middle East tension."
Additionally, according to d'Anethan, sideways price action and settling into a range might pave the way for more explosive moves in the cryptocurrency space. Leveraged traders could take a position and then experience severe liquidation events when the scene clears, leading to a definitive move in the markets.
"It might need some time or other catalyst rather than known events to turn this sentiment back to bullish," Heo stated.
April 2024, Cryptoniteuae