Traders affected by bearish trends in Bitcoin and Ethereum for the past 7 weeks. With increasing regulations, doubts about macroeconomic data, and looming negotiations on the US debt ceiling, Bitcoin’s current late-July outlook could be in for a further 10% correction. In April, the market experienced a sharp decline following a descending wedge structure, leading to a $1.11 trillion total capitalization. This meant that for bullish traders, it would take extra effort to break out of the downward trajectory.
Bullish Market Sentiment Indicated
Sticky inflation, higher interest rates, and downward revisions to gross domestic product have been further weighing on the market. Adding to the external pressures, the European Systemic Risk Board (ESRB) has come out with a warning that stablecoins aren’t sufficiently transparent, citing Tether (USDT) as an example, making traders leery.
But what are derivatives suggesting? Perpetual contracts currently show a neutral stance, with an equal presence of leveraged longs and shorts in the futures market. To get a sense of the market sentiment, traders also gauge the put-to-call ratio, and presently the ratio is below 1.0, favoring call (buy) options and implying more bullishness in the market.
Potential 10% Correction in Bitcoin Price by Late July
However, there isn’t enough evidence to suggest that there will be a breakout towards the upside anytime soon. Bears remain in control and Bitcoin could possibly decline further before July. Traders are cautious due to uncertain macroeconomic conditions, delaying action until more clarity emerges. Undoubtedly, Bitcoin’s price could face a 10% correction in late July if things remain the same.
Bearish Trend Expected to Continue with Looming Debt Ceiling Debate
In conclusion, traders will need to take extra caution when dealing with the cryptocurrency markets, as externalities and macroeconomic pressures will continue to drag down prices and make way for further correction. Bearish trend may continue due to factors like looming debt ceiling debate in June, impacting market sentiment. The market is currently at a standstill, facing challenges and awaiting new developments for a potential breakthrough. For the time being, traders should stay vigilant and keep up with the news in order to be better prepared.
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