Bitcoin Drops 6% Amid Macro Concerns, Traders Remain Bullish

Bitcoin has recently experienced a sell-off, driven by broader macroeconomic concerns. This downturn has led to a decrease in its value, with sell signals emerging across various time frames. These signals suggest a potential exhaustion of the bullish trend that has been in place since April 20. The breakdown of the uptrend, visualized by the trend line connecting higher highs and higher lows, indicates a cooling-off period where assets tend to retrace to key support levels.

Despite the current sell-off, professional traders maintain a bullish outlook on Bitcoin's future price. Several analysts believe that the cryptocurrency has strong potential to extend its uptrend. This optimism is supported by favorable macroeconomic conditions, robust demand, and sustained accumulation by institutional investors. The ask-dominated spot orderbook at 25% depth signals that investors are not looking to buy and are interested in selling spot BTC here, which could be a temporary setback rather than a long-term trend.

The bearish divergence and swing failure patterns observed on the monthly and weekly timeframes further hint at a looming correction for Bitcoin. However, these patterns do not necessarily indicate a prolonged bear market. The monthly candlestick for May is in the red, but June will determine whether a bear market is underway. If the next monthly close is also in the red, it could signal a more significant cause for concern. According to the analyst OrderAndFlow, "Next month is really where it all lies. If we lock in a red monthly next, then it’s a different story, and will be a much more likely cause for concern."

On-chain analyst Willy Woo also highlighted the bearish divergence on the weekly chart, noting that Bitcoin has two days and 16 hours to rally or it will print a bearish divergence on weekly charts. This divergence is more nuanced on the weekly timeframe, hinting at a potential correction. The volume profile shows a key high volume node around $100,000, which could act as a support level during the correction.

Despite the current sell-off, Bitcoin maintains its position around $105,000 amid strong institutional demand signals. This demand, coupled with the favorable macroeconomic conditions, suggests that the current downturn may be a temporary setback rather than a long-term trend. Professional traders remain bullish on Bitcoin's future price, believing that the cryptocurrency has strong potential to extend its uptrend. The overall Bitcoin price outlook remains uncertain, but it leans bearish in the short term. However, the long-term outlook remains positive, with several factors indicating that the current bull market may still have room to run.

Bitcoin’s recent sell-off is a response to macroeconomic turbulence, yet professional traders are maintaining a bullish outlook on its future price. Despite the pressure from geopolitical tensions and declining bond yields, Bitcoin continues to exhibit resilience among experienced investors. The ongoing demand for Bitcoin futures indicates traders are confident in the cryptocurrency’s recovery amidst external pressures.

Bitcoin (BTC) experienced a significant drop from May 27 to May 30, retesting the pivotal $104,000 mark. This decline marked the first substantial price adjustment after peaking at $111,970 on May 22. However, BTC derivatives data suggests that bullish sentiment remains intact among seasoned traders despite these fluctuations. The recent sell-off aligns closely with the changing dynamics of U.S. Treasury yields. BTC has shown a correlation with these bonds, indicating that broader economic factors play a critical role in its price movements. As market participants reacted to the escalating trade war spearheaded by U.S. authorities, risk aversion increased, leading to a heightened focus on stable investments.

Despite the correction, the metrics surrounding Bitcoin futures and options remain strong. The current futures premium is set at a stable 7%, indicating that traders are not overly leveraged. This consistent sentiment, reflected through open interest metrics, reveals that participation in BTC trading remains solid, with only a slight drop from prior levels. With Tether (USDT) trading at a marginal 0.4% discount, the data highlights a strategic pivot toward stablecoins among investors. This transition suggests that market participants are positioning themselves to mitigate risk as they await clearer macroeconomic signals. The fact that exchange-traded funds (ETFs) saw $347 million net outflows does not signify a lack of interest; rather, it reflects a tactical repositioning among investors.

The interplay between Bitcoin’s price movements and macroeconomic factors indicates a complex but optimistic landscape for traders. The current metrics underscore a sustained interest in Bitcoin, as participant sentiment remains resilient despite recent challenges. Traders should monitor future economic indicators closely to navigate the evolving market climate effectively.