Bitcoin’s price has plummeted by $20,000 from its peak, sparking widespread concern among investors about the possibility of further losses. Many believe the current downturn signifies the start of a bear market, driven by weakening bull market peaks with each cycle. But is this truly the case?
Is the Crypto Bull Market Over?
Open positions in futures have notably declined. Dogecoin (DOGE) alone saw a drop from approximately $10 billion to around $2 billion in open positions within a month. This trend is mirrored across numerous altcoins and Bitcoin (BTC). On July 4, Bitcoin’s price dipped below $60,000, and investor sentiment hit a two-week low shortly thereafter, as indicated by the long-short metric. Market makers, whales, and professional investors remain cautious about high-leverage long positions.
On June 7, Bitcoin was trading at $72,000. However, the one-month change in futures positions has raised alarms among experts due to diminishing enthusiasm. According to DCinvestor, 25% corrections in Bitcoin prices from intra-cycle highs are typical and do not necessarily signal the end of a bull market.
What Do Top Traders Expect?
An important indicator tracks the intensity of long and short positions among top traders in futures. Traders on Binance and OKX have significantly reduced their leveraged long positions, reaching their lowest levels in two weeks. The indicator fell from 1.8x long on July 2 to 1.2x over the past three days, suggesting that even professional investors may be wary of short-term bullish scenarios.
User-Usable Inferences
Key Takeaways for Investors:
- Monitor the reduction in leveraged long positions as a signal of professional sentiment.
- Consider the typical 25% corrections in Bitcoin as part of normal market cycles.
- Stay updated on market trends and metrics, such as “buy Bitcoin” search trends.
- Compare Bitcoin performance with other assets like gold and tech stocks for broader market context.
- Remain cautious but prepared for potential market rebounds triggered by unforeseen events.
The summer months, the failure to surpass the all-time high (ATH), uncertainties around MTGOX returns, and other factors contribute to the current cautious sentiment. However, a sudden upward breakout could surprise the market. Only time will reveal the triggers and whether ETFs and political factors will play significant roles in the crypto market’s future trajectory.
