In the absence of retail trader FOMO and the use of high leverage, Bitcoin price surges above $50,300. Cointelegraph elaborates on the significance of this development.
Bitcoin (BTC) rises to $49,752, marking a 17.5% increase in the past week and crossing $50,000 for the first time since December 2021. This surge is partly fueled by inflows into spot Bitcoin exchange-traded funds (ETFs) since their launch on Jan. 11. However, questions remain about whether these inflows are robust enough to sustain BTC gains above $50,000. Major mutual fund managers like BlackRock, Fidelity, and ARK 21 Shares have successfully introduced their spot Bitcoin ETFs, amassing over $10 billion in assets within a month. In the coming months, Bitcoin spot ETF flows are expected to grow further as trading firms complete their due diligence on these new investment instruments. As Bitcoin reaches new multi-year highs, the sentiment of retail investors towards the cryptocurrency and macro markets becomes increasingly relevant.
Retail investors closely monitor both macroeconomic trends and the cryptocurrency market.
Traders are closely monitoring macroeconomic indicators following the historic closure of the S&P 500 above 5,000 points on Feb. 9, accompanied by a 13.9% three-month gain. The bullish trend might temporarily slow down as investors await quarterly reports from companies such as Coca-Cola, Airbnb, Coinbase, and DoorDash. Additionally, U.S. inflation CPI data, scheduled for Feb. 13, will influence the U.S. Federal Reserve’s interest rate decisions. Market expectations suggest potential rate cuts from the current 5.25% level, which could lead investors to shift away from fixed-income assets. However, the potential move towards riskier assets does not guarantee benefits for cryptocurrencies. Despite easier access through spot ETFs, stagnant Google searches for “Buy Bitcoin” over the past weeks suggest that the asset may not be attracting mainstream attention yet.
Search trend for “Buy Bitcoin” terms. Source: Google
Data indicates that retail traders often join bull runs a few days or weeks after major price milestones, lagging behind the cycle. Despite this trend, metrics like the demand for stablecoins in China do not reflect increased retail trader activity. Normally, excessive retail demand for cryptocurrencies results in the stablecoin premium rising above 1.5%, while bear markets lead to a discount.
USC Coin (USDC) peer-to-peer trades vs. USD/CNY. Source: OKX
Currently, the stablecoin USD Coin (USDC) is trading above the official U.S. dollar currency, maintaining a 1% premium for the last four weeks. Bulls may view the absence of excitement as a favorable sign, suggesting that the usual fear of missing out (FOMO) behavior observed among retail investors has not yet manifested.
Bitcoin professional traders have recently increased their long positions with leverage.
The long-to-short net ratio of leading traders takes into consideration additional factors that might have had an exclusive impact on the stablecoin markets. Analysts can more accurately assess whether whales and arbitrage desks are favoring bullish or bearish positions by consolidating their positions across spot, perpetual, and quarterly futures contracts.
Exchanges’ top traders BTC long-to-short ratio, 12 hours. Source: Coinglass
At Binance, top traders’ long-to-short ratio has risen to 1.35 from 1.24 on Feb. 9, indicating increased leverage longs despite a 14% weekly gain in BTC. Meanwhile, at OKX, traders shifted from a 0.46 short-favoring ratio to 1.07 long-to-short on Feb. 12, reflecting a change to a bullish stance. Professional Bitcoin traders show confidence after BTC surpassed $49,000 on Feb. 12, despite short-term risks from macroeconomic uncertainty and weakness in Chinese real estate markets. The sustainable rise above $50,000 has occurred without excessive leverage or retail FOMO, but the rally relies on continued inflows into spot Bitcoin ETFs.
