Bitcoin price races toward $27K, but a swift recovery is not confirmed by market data
Bitcoin might have displayed strength by quickly recovering from the $25,500 support level on June 6, but that doesn’t mean that breaking above $27,500 will be an easy task.
Investors still expect stricter regulatory scrutiny after FTX’s bankruptcy in November 2022, including the recent suits against Coinbase and Binance.
A total of eight cryptocurrency-related enforcement actions have been undertaken by the United States Securities and Exchange Commission (SEC) over the past six months. Some analysts suggested the SEC is attempting to redeem itself for failing to police FTX by taking action against the two leading exchanges.
Additionally, looking at a wider angle, investors fear that a global recession is imminent, which limits the upside of risk-on assets such as stocks, cryptocurrencies and emerging markets.
The eurozone entered a recession in the first quarter of this year, according to revised estimates from the region’s statistics office, Eurostat, released June 8. Poor economic performance might limit the European Central Bank’s ability to further increase interest rates to tackle inflation.
Billionaire Ray Dalio, founder of Bridgewater Associates, said the U.S. is seeing stubbornly high inflation along with elevated real interest rates. Dalio warned of an excess debt offer amid a shortage of buyers, which is especially concerning since the U.S. government is desperate to raise cash after the debt ceiling was hit.
Recent macroeconomic data has been mostly negative, especially after China announced a 4.5% decline in imports year over year on June 6. Furthermore, Japan posted a 0.3% quarter-over-quarter contraction in gross domestic product on June 7.
Let’s look at Bitcoin (BTC) derivatives metrics to better understand
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