Bitcoin’s short-term demand could be muted by global economic risks and fiscal challenges.
Bitcoin
BTC
$102,388
experienced significant selling pressure on Jan. 13, falling below $90,000 for the first time in eight weeks. This decline represented a 12.5% price drop over seven days, tempering traders’ optimism. Despite this, Bitcoin derivatives metrics signaled a neutral to bearish outlook, suggesting that whales and market makers remained largely unaffected by the downturn.
Bitcoin futures monthly contracts typically trade at a premium over the spot market due to their longer settlement period. The current annualized premium of 11% exceeds the neutral range of 5% to 10%,
reflecting optimism among market participants. Similarly, the funding rate for perpetual BTC contracts — preferred by retail traders — has remained positive, indicating a neutral to positive sentiment.
Bitcoin price pressured as investors exit risk markets
Investor sentiment deteriorated after the S&P 500 index failed to maintain levels above 6,000 on Jan. 6, declining 4.1% over the following week. A stronger-than-expected US jobs report raised concerns that the Federal Reserve might keep interest rates elevated for longer than anticipated.
This uncertainty pushed the 10-year US Treasury yield to its highest level since November 2023, signaling that traders demand higher returns to hold government bonds. Such dynamics often reflect fears of inflation or recession, compounded by weakness in the broader stock market.
The appreciation of the US dollar against a basket of foreign currencies, measured by the DXY index, indicates that major investors are adopting a cautious stance, favoring cash and short-term bonds.
Geopolitical tensions intensified after the US imposed stricter sanctions on Russian crude oil exports, threatening supply chains to key consumers like China and India, according to Yahoo! Finance.
Some analysts argue that Bitcoin’s recent performance has relied excessively on MicroStrategy. On Jan. 13, the company announced the completion of another Bitcoin purchase, adding 2,530 BTC within a week. This brings its total Bitcoin holdings to a substantial level, supported by $6.5 billion in approved share sales. Additionally, the firm plans to raise $2 billion through perpetual preferred stock offerings.