Bitcoin has gained 6.5% after defending the $26,300 level following a momentary retest of the $25,000 support on June 15. However, the cryptocurrency has declined by 12.7% in the last two months, leading to a slightly bearish sentiment among investors. The dismissal of Binance.US’s temporary restraining order by Judge Amy Berman Jackson of the United States district court has somewhat improved investors’ sentiment. On June 16, the exchange reportedly reached an agreement with the U.S. Securities and Exchange Commission (SEC), avoiding the freeze of its assets.

On a longer timeframe, the global regulatory environment has been extremely harmful to cryptocurrency prices. The European Union signed the Markets in Crypto-Assets (MiCA) regulations into law on May 31, and the SEC is trying to unilaterally label exactly which altcoins it views as securities and litigating with the two leading global exchanges.

Bitcoin Derivatives Metrics

Investors can analyze Bitcoin derivatives metrics to better understand how professional traders are positioned amid weaker macroeconomic perspectives. Margin markets allow investors to borrow cryptocurrency to leverage their positions. OKX provides a margin-lending indicator based on the stablecoin/BTC ratio. The above chart shows that OKX traders’ margin-lending ratio has been declining since June 10, indicating the overwhelming dominance of longs is over. The present 23:1 ratio favoring stablecoin lending still favors bulls but sits near the lowest levels in five weeks.

Investors should also analyze the Bitcoin futures long-to-short metric, as it excludes externalities that might have solely impacted the margin markets. There are occasional methodological discrepancies between exchanges, so readers should monitor changes instead of absolute figures.

Top traders at OKX vastly decreased their shorts on June 15 as the Bitcoin price plunged to its lowest level in three months at $24,800. However, those traders were not comfortable keeping a ratio that favored longs, and it has since moved back to a 0.80 ratio, in line with the two-week average. The opposite movement happened at Binance, as top traders reduced their long-to-short ratio to 1.18 on June 15 but subsequently added longs, and the indicator stands at 1.25. Albeit an improvement, Binance’s top traders’ long-to-short ratio is presently in line with the previous two-week average.

Hawkish Fed, Stocks Market Rally, and Crypto Falling Behind

Bitcoin bulls lack the confidence to leverage long positions using margin and futures markets. BTC lacks momentum as investors’ attention has shifted to the stock market after the Fed decided to pause its interest rate hikes, improving the outlook for corporate earnings. Despite the extremely negative regulatory pressure, professional traders did not flip bearish, according to Bitcoin derivatives metrics. However, bears have the upper hand as the 20-day resistance at $27,500 strengthens, limiting the short-term upside to a mere 3.8%.

Analysis

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