NEWS

Bitcoin

$BTC BTC

100,239 €

faced strong rejection after reaching an all-time high of 124,089 dollars on Thursday. The drop below 117,500 dollars triggered 227 million dollars in liquidations of leveraged long positions, although derivative metrics were not significantly affected by the move.

Are traders overreacting to U.S. inflation data, or is there something within the cryptocurrency market that is preventing a clear breakout above the 122,000 dollar level?

Annualized premium of 3-month BTC futures. Source: laevitas.ch

The annualized premium of BTC futures was barely affected by the drop of 6,630 dollars. The indicator currently stands at 9%, within the neutral range of 5% to 10%. This suggests that the recent all-time high was not driven by excessive leverage and that traders remained relatively calm despite the drop below 118,000 dollars. Nonetheless, the data hints at a lack of confidence in a rally towards 150,000 dollars.

Is higher inflation behind Bitcoin's drop?

Some might argue that the annual increase of 3.3% in the U.S. Producer Price Index (PPI) for July pushed traders to be more risk-averse, as the inflation figure turned out higher than anticipated. The initial negative reaction reflected lower odds of multiple interest rate cuts. However, the S&P 500 eventually erased its intraday losses, indicating that Bitcoin's sharp correction was likely driven by other factors.