Bitcoin, the world’s largest crypto to date, seems to be heading down in terms of price performance, as ever since its all-time high of $68,789.63, which happened on November 10, 2021, the number one crypto is on a downhill slide.
However, the latest peak in Bitcoin’s price came just as the United States announced that inflation had hit a 30-year high. Furthermore, trader confidence in Bitcoin took yet another hit when China-based real estate developer Evergrande was on the verge of bankruptcy.
Meanwhile, another topic is on the crosshairs of crypto traders – the regulatory pressure on stablecoin issuers. It turns out that VanEck’s spot Bitcoin exchange-traded fund rejection by the U.S. Securities and Exchange Commission was mainly due to Tether’s stablecoin, USDT, being insolvent and the SEC’s concerns over Bitcoin price manipulation.
The U.S. Financial Stability Oversight Council went a step further and stated its concern over stablecoin adoption and other digital assets during a hearing focused on consumer protection and their risks.
“The Council recommends that state and federal regulators review available regulations and tools that could be applied to digital assets,” the regulator added.
Meanwhile, the worsened Bitcoin investment climate also managed to hit CME’s Bitcoin futures contracts premium.
A price premium is a difference between longer-term futures contracts to the current spot price in regular markets. In Bitcoin’s case, this figure went straight down to zero, which is an alarming red flag for investors. The normal range of price premiums is around 0.5%–2% annualized premium in healthy markets, a situation known as contango.
However, despite all of the stagnation for Bitcoin and the entire crypto market, top Bitcoin traders are bullish about the market, as data from various exchanges suggest a shift in the traders' long-to-short net positioning.
It turns out top traders on both Binance, Huobi, and OKEx have increased their leveraged long positions. And while Binance recorded a slight dip in the long-to-short position ratio, OKEx traders made a massive spike from 1.51 to 2.91 in just two weeks.
And traders may be right, once again, since Bitcoin is in recovery mode, after hitting the $45,000 and $46,000 support zones in a matter of just seven days. Data from CryptoBrowser show a six percent price increase on December 21, which skyrocketed Bitcoin past $48,000 and into sub-$49,000 territory.
Bitcoin’s push upwards was also reflected on the entire sector. For instance, Ethereum also recovered six percent of its losses, currently trading above $4,000. Other projects like Binance Coin, Solana, Cardano, and Ripple, are also increasing in value, while projects like Terra, Avalanche, and Polygon made double-digit price increases in the past 24 hours.