Traders Turn Bearish on Bitcoin Following High-Profile Political Tensions, Data Shows

Bitcoin experienced a significant price drop, briefly approaching $100,000, triggering increased market volatility. This downturn was linked to a social media exchange between Donald Trump and Elon Musk. The overall cryptocurrency market cap subsequently decreased, reflecting widespread risk aversion. Derivative data revealed a sharp shift in trader sentiment towards bearish positions. Binance net taker volume plummeted, marking the largest intraday reversal this year. This reaction underscored the impact of macro events and influential figures on market psychology. Bitcoin perpetual futures funding rates turned negative, with short sellers paying premiums to maintain their positions. Historically, such negative funding rates have often preceded Bitcoin price recoveries. Analyst Darkfost highlighted prior instances where similar patterns led to substantial rallies. Although past performance is not predictive, traders are anticipating a potential short squeeze. Some are watching for signs of a price rebound.