Bitcoin (BTC) Reclaims $84,500 Amid Trade Tensions
Bitcoin (BTC) surged back to the $84,500 mark on April 14, a recovery that seems to be partially driven by an announcement from US President Donald Trump regarding temporary relief on import tariffs. However, optimism among traders quickly diminished on April 13 when it became clear that this tariff relaxation was not permanent, and there remained the possibility of revisiting tariffs affecting the electronics supply chain.
The ongoing trade disputes between the US and China have created a cloud of uncertainty over Bitcoin markets, leading to a decline in traders’ confidence. This uncertainty is reflected in Bitcoin’s inability to surpass the $86,000 threshold, and the limited short-term potential observed in BTC derivatives may set a cautious tone for the upcoming days.
Bitcoin Futures Premium Shows Sign of Weakness
The annualized premium on Bitcoin’s monthly futures contracts peaked at 6.5% on April 11 but has since fallen to around 5%, a level that indicates a shift toward a neutral to bearish sentiment. Typically, sellers expect an annualized premium of 5% to 10% for longer settlement periods, meaning that anything below this range suggests a waning interest from leveraged buyers.
Traders’ Sentiment Diminishes as Stock Market Correlations Weigh In
The brief surge in trader enthusiasm can be traced to President Trump’s announcement on April 13 regarding a review of tariffs on imported semiconductors. This statement implies that exemptions for technology products like smartphones and computers may not be finalized, as Trump emphasized the need to produce chips domestically.
During this period, Bitcoin traders experienced fluctuations in their emotions, largely influenced by the performance of major technology stocks that rely heavily on global trade. The strong correlation between Bitcoin and stock market movements has dampened bullish sentiment, raising questions about whether this trend is limited to Bitcoin futures.
Analyzing Bitcoin Options Markets for Sentiment Insights
To better understand whether Bitcoin traders are merely following trends in the S&P 500, it is beneficial to examine the Bitcoin options market. A rise in the 25% delta skew indicator above 6% indicates that professional traders expect a significant price drop, as put options become more expensive relative to call options.
On April 13, the delta skew for Bitcoin options temporarily dipped below 0%, indicating a brief moment of optimism. However, this positive momentum did not sustain on April 14, as data from Bitcoin futures revealed a lack of strong bullish sentiment despite the recovery from the lows of $74,440.
Weak Demand for Bitcoin ETFs Contributes to Limited Trader Optimism
Market sentiment can also be assessed through the demand for stablecoins in China. Typically, robust retail interest in cryptocurrencies drives stablecoins to trade at a premium of 2% or more above the official US dollar rate. Conversely, a premium below 0.5% often signals fear as traders withdraw from the crypto markets.
Between April 6 and April 11, Tether (USDT) in China was trading at a 1.2% premium, which indicated a moderate level of enthusiasm. However, this trend has reversed, with the premium now sitting at just 0.5%, suggesting that earlier excitement has faded. Consequently, traders appear to be cautious and lack confidence in Bitcoin’s ability to surpass the $90,000 mark anytime soon.
Additionally, the announcement of Strategy’s $286 million Bitcoin acquisition at a price of $82,618 did little to enhance sentiment, as investors believe that the recent temporary separation from stock market trends was primarily a result of this purchase. Furthermore, Bitcoin spot exchange-traded funds (ETFs) experienced outflows totaling $277 million between April 9 and April 11, further eroding trader confidence in the market.
This article is intended for informational purposes only and does not constitute legal or investment advice. The opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.
