Bitcoin reclaimed the $77,000 level as declining oil prices boosted global stock markets, reducing inflation fears. However, professional crypto traders remained cautious due to $2.66 billion in spot Bitcoin ETF outflows and a lack of leveraged bullish positions in futures markets. MicroStrategy’s pause on Bitcoin acquisitions to reduce debt also contributed to subdued sentiment.
Bitcoin reclaimed the $77,000 level on Monday following a recovery in global stock markets. US President Donald Trump stated on Saturday that talks with Iran to reopen the Strait of Hormuz were progressing, causing crude Brent oil prices to retreat to a five-week low.
Global stock markets reacted positively, with reduced inflationary pressure prompting investors to rotate cash positions back into bonds and equities. Despite the overall drop in risk perception, professional Bitcoin traders refused to flip bullish.
Bitcoin 3-month futures contracts traded at a 2% annualized premium relative to spot markets, indicating a lack of demand for bullish leveraged positions. Under neutral conditions, this indicator typically ranges between 5% and 10% to compensate for capital costs.
Recent outflows from spot Bitcoin exchange-traded funds likely contributed to the bulls’ lack of confidence. US-listed spot Bitcoin ETFs experienced $2.66 billion in net outflows since May 7, signaling fading appeal for institutional investors.
MicroStrategy’s pause on Bitcoin acquisitions to repurchase some of its convertible bonds has also fueled concerns. The company held $8.7 billion in convertible debt with an average maturity of less than 4 years.
MicroStrategy’s decision to focus on Bitcoin yield per share might temporarily hold back additions to its reserves, but it benefits shareholders by reducing financial leverage and lowering potential share issuance. It remains unclear what could flip Bitcoin traders’ sentiment in a favorable direction.
