Bearish sentiment is intensifying in the Bitcoin market as professional traders express doubts about the cryptocurrency holding the $66,000 level. Following the departure of David Sacks as the Crypto and AI czar and the absence of a clear U.S. Strategic Bitcoin Reserve plan, Bitcoin (BTC) dropped to $65,530, marking an 8% decline in just one day. This downturn resulted in over $210 million in leveraged bullish futures being wiped out, leaving most call options worthless during the monthly expiry.
The implications for the financial markets are significant, with traders now assigning a 53% chance that Bitcoin will remain below $66,000 by April 24. This bearish outlook is compounded by rising inflation fears, geopolitical tensions, and a lack of progress on Bitcoin legislation, which has contributed to Bitcoin’s underperformance against the S&P 500. The options market reflects this sentiment, as the delta skew jumped to 15%, indicating a premium on put options and a lack of confidence among major investors.
Market professionals should consider the heightened volatility and risk aversion currently influencing Bitcoin trading. As geopolitical events unfold, traders may need to reassess their positions quickly, particularly if any developments could shift market sentiment. The current environment calls for caution, as the potential for rapid changes in sentiment could lead to significant price movements.
Source: cointelegraph.com