The Bitcoin futures premium plunged to its lowest levels in 10 months, but traders have refused to turn bearish.
Bitcoin (BTC) price plunged 10.8% between Aug. 25 and Aug. 27 after briefly exceeding $65,000. The downturn has been linked to concerns of a possible recession in the United States and excessive optimism in the stock market, as highlighted by Goldman Sachs’ head of asset allocation in an Aug. 28 CNBC interview.
Although Bitcoin eventually reclaimed the $58,500 support, traders’ morale was significantly affected, as the primary gauge of appetite for leveraged longs fell to its lowest level in ten months. This indicator flipped to neutral on Aug. 28, but traders believe that bulls will need more time to regain their confidence, which could lead to further price corrections.
Goldman’s Christian Mueller-Glissmann noted that investors should view the Aug. 5 global market crash, triggered by Japan’s central bank decision, as “a warning shot.” Mueller-Glissmann added in the CNBC interview that “we are sadly nearly back to the same problem we were at a month ago.” Essentially, there is excessive optimism despite mixed macroeconomic data.
