Bitcoin (BTC) price rallied over 10% between April 9 and April 14, marking the highest daily close in more than ten months. While some analysts may argue the move justifies a degree of decoupling from traditional markets, both the S&P 500 and gold are near their highest levels in over six months.
Bitcoin price breaks $30,000 despite macro headwinds
Bitcoin’s gains and rally above $30,000 also happened while the dollar strength index (DYX), which measures the U.S. currency against a basket of foreign exchanges, reached its lowest level in 12 months.
The indicator fell to 100.8 on April 14 from 104.7 one month prior as investors priced in higher odds of further liquidity injections by the Federal Reserve.
Related: Bitcoin price teases $30K breakdown ahead of US CPI, FOMC minutes
The latest Federal Reserve’s monetary policy meeting minutes, released on April 12, made explicit reference to the anticipation of a “mild recession” later in 2023 due to the banking crisis. Even if inflation is no longer a primary concern, the monetary authority has little room to raise interest rates further without escalating an economic crisis.
Even if inflation is no longer a primary concern, the monetary authority has little room to raise interest rates further without escalating an economic crisis.
Strong macroeconomic data explains investors’ bullishness
While the global economy may deteriorate in the coming months, recent macroeconomic data has been mostly positive. For example, the European Union’s statistics office reported that industrial production in the 20 member countries increased 1.5% month on month in February, whereas economists polled by Reuters expected a 1.0% increase.
Furthermore, China’s latest macroeconomic data showed an encouraging trend, with exports increasing 14.8% year on year in March, snapping a five-month decline and surprising economists who expected a 7% decline. As a result, China’s trade balance for March was $89.2 billion, far exceeding the $39.2 billion market consensus.
The contrast between the current economic momentum and the forthcoming recession triggered by higher financing costs and a reduced appetite for risk among lenders causes Bitcoin investors to question the sustainability of the $30,000 support.
Let’s look at the Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market environment.
BTC derivatives show no excessive leverage from longs
Margin markets provide insight into…
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