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Bitcoin's Bullish Momentum Fades as Futures Premium Drops to 5%

Coin WorldThursday, May 15, 2025 5:20 pm ET

1min read

Bitcoin (BTC) has faced challenges in surpassing the $105,000 mark since May 10, leading traders to question the sustainability of the bullish momentum. Despite reclaiming the $104,000 level, the demand for leveraged long positions has significantly decreased, as evidenced by the decline in the Bitcoin futures premium. On May 14, the annualized Bitcoin futures premium peaked at 7% but subsequently fell to 5%, nearing the neutral-to-bearish threshold. This decline is attributed to broader macroeconomic uncertainties, as Bitcoin's price movements have closely followed those of the stock market.

Investors' confidence in Bitcoin's $100,000 support level remains strong, despite the recent drop in leveraged bullish positions. This confidence is bolstered by steady inflows from institutional investors, with net inflows of $320 million into US Bitcoin exchange-traded funds (ETFs) on May 14. This suggests a shift in investors' perception of Bitcoin from a risk-on asset to a non-correlated instrument, which may reduce the likelihood of sharp price corrections.

Bitcoin's rally to $105,000 is contingent on macroeconomic trends, such as the US Federal Reserve's balance sheet and recession risks. The high correlation between Bitcoin and the S&P 500, which has rarely persisted for more than two months, further underscores the importance of macroeconomic developments in determining Bitcoin's price trajectory. Despite the recent decline in leveraged bullish positions, the strong confidence in the $100,000 support level and ongoing institutional demand suggest that Bitcoin's role in every portfolio is evolving, bolstering its support at $100,000.

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