Bitcoin continues to face resistance below the $110,000 mark as macroeconomic uncertainties and the looming risk associated with Nvidia's earnings report keep investor sentiment in check. Despite positive signs such as strong inflows into spot BTC ETFs and promising Bitcoin options data, traders remain cautious about the digital currency's ability to reach new all-time highs.
The postponement of retaliatory tariffs on European Union imports by US President Donald Trump on May 26 provided a temporary boost to market sentiment. However, Bitcoin struggled to maintain its position above $110,000, prompting concerns among traders about the currency's bullish momentum. Even if Bitcoin retreats to the $105,000 level, the increasing institutional interest and robust derivatives market suggest that traders are not overly leveraged and are relatively unconcerned about a potential correction.
The demand for leveraged long Bitcoin positions has been on the rise, as indicated by the BTC futures premium increasing to 8% on May 26. While this is a modest uptick from the previous day, it remains within the neutral range of 5% to 10%. Comparatively, in December 2024, the Bitcoin futures premium surged to 20% when Bitcoin crossed the $100,000 mark for the first time.
Investor focus now turns to Nvidia's earnings report on May 28, as it is expected to provide insights into the broader economic consequences of ongoing trade conflicts. Anticipation surrounding Nvidia's performance could explain Bitcoin's struggle to break through previous highs. The Bitcoin options market, however, is signaling an increased likelihood of upward movement, with whales and market makers showing confidence despite Bitcoin trading just below its all-time high.
The growing institutional demand for Bitcoin is gradually reshaping risk perceptions among major investment firms. For instance, Michael Saylor's firm, MicroStrategy, acquired $427 million worth of Bitcoin between May 19 and May 25, demonstrating continued institutional interest in the digital asset. Additionally, spot Bitcoin ETFs saw a significant $2.75 billion in inflows during the same period.
JPMorgan's recent decision to allow clients to purchase spot Bitcoin ETFs signifies a notable shift in the traditional financial sector's approach to cryptocurrencies. While the move does not include custody services or official endorsements of cryptocurrencies, it opens doors to indirect Bitcoin exposure for the bank's massive customer deposits.
As US markets were closed on May 26 for the Memorial Day holiday, any positive sentiment stemming from delayed tariffs may be offset by concerns over US government debt and economic recession fears
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