Key Notes
- Data from CryptoQuant indicates that Bitcoin whales are reducing leverage which is a bearish indicator.
- Bitcoin faced rejection at $89,000 and is currently trading near $84,986 ahead of the US PCE data release.
- Bitcoin options expiry of 139,000 contracts and declining implied volatility will further weigh on the price action ahead .
Facing a strong rejection at $89,000, Bitcoin’s (BTC) price has already staged some reversal ahead of US PCE data release on Friday.
As of press time, BTC is down 1.76%, trading at $84,986, with daily trading volume up by 20% to more than $30 billion. The Bitcoin Macro Index shows signs of a bearish market ahead.
Bitcoin Macro Index Flashes Warning Signs
As BTCUSD struggles to break past crucial resistance levels, on-chain metrics are already showing some weakness amid signs of losing their bullish momentum. The Bitcoin Macro Index , developed by Capriole in 2022, leverages machine learning to analyze a broad range of metrics.
The index provides a strong indication of Bitcoin’s relative value across historical market cycles.
However, since late 2023, the Bitcoin Macro Index has been forming lower highs, while BTC/USD has been recording higher highs, creating a “bearish divergence.” Although this pattern is normla in previous bull markets, it suggests the possibility that BTC/USD may have already reached a long-term peak. This is not a very great sign, remarked Edwards.
The CryptoQuant data shows that Bitcoin whales are reducing leverage, indicating a shift in market sentiment. A decline in BTC flows to derivatives suggests a reduced risk appetite among these large holders. Historically, this trend has often been associated with bearish market movements.
BTC Price Continues to Face Difficulty in Gaining Upside
“Bitcoin’s price is facing further downside pressure, slipping below $85,000, as US PCE core inflation came in higher than expected at 2.8% for February. Macro indicators continue to play an important role in influencing Bitcoin’s movements.
Supporting one of the recent BTC price analyses, veteran trader Peter Brandt confirmed that the BTCUSDT pair could see further downside to $70,000.
Today’s Bitcoin options expiry data shows 139,000 BTC contracts expiring today with a Put/Call ratio of 0.49, Max Pain point of $85,000, and a notional value of $12.1 billion. The quarterly delivery accounted for over 40% of total options positions, with BTC options representing nearly 80% of these deliveries.
Implied volatility saw a decline during the period as BTC’s major-term volatility fell below 50%.
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