Bitcoin (BTC) saw a pullback of $2,650 after facing resistance at $92,250, highlighting the influence of broader economic factors and trader skepticism. Despite occasional rallies, the cryptocurrency’s future remains uncertain as traders anticipate clearer economic signals to dictate price movement.
Key Highlights:
- Macroeconomic challenges, such as the delayed jobs report and a struggling housing market, have prompted traders to scale back their Bitcoin positions.
- Institutional traders are bearing high costs to protect against potential Bitcoin price drops, while China’s crypto market experiences stablecoin discounts, signaling a shift away from riskier assets.
Bitcoin, priced at $90,110, faced downward pressure after struggling to break past $92,250 on Monday. The pullback came as U.S. stock markets reversed course amid rising concerns about job market conditions and the overvaluation of AI investments. As the Federal Reserve prepares to announce its monetary policy decision on Wednesday, market participants are uncertain whether Bitcoin can push toward $100,000 in the short term, with risk perception playing a major role in determining price movements.
Futures Premium Signals Caution
The Bitcoin futures market shows low demand for bullish exposure. The basis rate, or the premium of monthly futures over spot prices, has remained below the 5% neutral threshold for two consecutive weeks. This reflects a lack of interest in leveraged bullish positions, a sign of the market’s hesitance in the face of an uncertain macroeconomic outlook.
The delayed U.S. government data on employment and inflation, resulting from a 43-day funding shutdown, has left traders in the dark about current economic conditions. Despite expectations of a 0.25% interest rate cut in December, there is little optimism among traders. A recent private job report revealed 71,321 layoffs in November, further dampening market sentiment.
Real Estate Woes Add to Pressure
The U.S. housing market is also adding pressure to Bitcoin’s price. Redfin reported that 15% of home purchase agreements were canceled in October, citing high housing costs and ongoing economic uncertainty. Meanwhile, delisting activity surged by 38% from October 2024, and the median list price fell by 0.4% from a year earlier. These factors point to a potential slowdown in the broader economy, which could impact Bitcoin’s growth prospects.
Bitcoin’s Struggle Compared to the Stock Market
Bitcoin’s underperformance was further exacerbated by the liquidation of $92 million in bullish BTC futures positions. Despite Bitcoin’s struggles, the S&P 500 index remained just 1.2% below its all-time high of 6,920 points, suggesting that risk sentiment is not entirely risk-off across all markets.
Options Market Shows Bearish Sentiment
Options markets are reflecting concerns about further downside, with Bitcoin whales and market makers demanding a 13% premium to sell Bitcoin put options on Deribit. This cost is indicative of bearish sentiment, yet Bitcoin has held steady around the $90,000 support level despite the negative sentiment.
Chinese Market Signals Bearish Outlook
Bitcoin’s outlook has also been affected by retreating traders in China, where stablecoins have been trading at a discount to the local currency. This suggests a shift away from cryptocurrency investments in the region, reinforcing the short-term bearish sentiment for Bitcoin. However, this does not necessarily point to a sharp drop in prices to $85,000 or below.
Lack of ETF Inflows Weighs on Bitcoin’s Bullish Sentiment
The absence of significant inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) over the past few weeks has dampened bullish sentiment further. With no major catalysts pushing Bitcoin higher, whether it can break the $100,000 barrier in the near future will depend heavily on clearer signals from the U.S. labor market and real estate sector. These indicators may take longer to materialize than any single decision from the Federal Reserve.
In conclusion, Bitcoin’s immediate prospects appear tied to broader economic conditions, with traders watching closely for signals from the job market and the housing sector. Until these factors come into clearer focus, Bitcoin may continue to struggle with resistance near $92,000.
