Important takeouts:
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The heavy liquidation played a role with Bitcoin returning to $95,000.
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The decline in Bitcoin’s correlation with stocks underscores an increased independence as an asset.
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Bullish institutional positioning contrasts with retailers’ attention, supporting gatherings that exceed $100,000.
Bitcoin (BTC) scored 11% between April 20th and April 26th, showing resilience by approaching the height of around $94,000. The relief rally followed a signal from the Trump administration on easing import tariffs and easing strong corporate revenue reports.
Investor confidence in Bitcoin was further boosted by a record $3.1 billion net inflow to find Bitcoin Exchange Sales Funds (ETFs) over five days. However, the key BTC derivative indicators show signs of bearish momentum and raise questions about whether the $100,000 target is still realistic.
Persistent Bitcoin futures contracts are preferred by retailers as they closely track the spot market. A positive funding rate means that buyers pay to maintain their position, so this rate reversal is usually linked to a bearish trend.
The sudden negative funding rate recorded on April 26th is very unusual in bull markets as it shows strong demand from sellers. The metric has been unstable since April 14th, but sellers were caught off guard as Bitcoin prices rose above $94,000. Since April 21, more than $450 million has been liquidated in the BTC short position.
Part of the updated trust and Bitcoin price strength could be attributed to a 7.1% weekly profit on the S&P 500. But despite this optimism, US President Donald Trump said on April 25 that negotiations depended on China’s concessions, bringing traders into question the sustainability of recent profits.
The factors driving stock markets and Bitcoin will differ as companies are currently reporting first quarter revenues even before the trade war escalation. In fact, Bitcoin prices are not closely correlated with the S&P 500.
Currently, the 30-day correlation between the S&P 500 and Bitcoin is 29%, well below the 60% level seen between March and mid-April. This low correlation does not imply a complete decoupling as investors’ sentiment is still influenced by macroeconomic factors, but it shows that Bitcoin is not merely a proxy for technology inventory.
Bitcoin’s status as an independent asset has been enhanced
The inability for Gold to maintain its bullish momentum after reaching an all-time high of $3,500 on April 22 was considered important for Bitcoin’s status as an independent asset class. While some traders have questioned the “digital gold” story, the longer BTC is over $90,000, the more confident investors may have and pave the way for further profits.
The increased demand for bear leverage in persistent BTC futures is not consistent with the sentiment of professional traders. Monthly Bitcoin futures contracts avoid financing rate fluctuations, so traders know leverage costs in advance.
On April 26th, the two-month Bitcoin Futures Premium rose to its highest level in seven weeks, indicating a strong interest in bullish positions. At 6.5%, this metric remains within the neutral 5% to 10% range, but away from bearish territory.
It is not uncommon to cut between permanent futures leverage demand and monthly BTC contracts. Even if retailers are cautious, a substantial accumulation by institutions that is sufficient to exceed $100,000 in the near future will be sufficient.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
