Bitcoin price races toward $27K, but a swift recovery is not confirmed by market data

Despite quickly recovering from the $25,500 support level on June 6, breaking above $27,500 may not be an easy task for Bitcoin. Regulatory scrutiny is expected after FTX’s bankruptcy in November 2022, including recent suits against Coinbase and Binance. The United States Securities and Exchange Commission (SEC) has undertaken eight cryptocurrency-related enforcement actions over the past six months. Additionally, a global recession could limit the upside of risk-on assets such as stocks, cryptocurrencies, and emerging markets. Margins and futures favour bullish momentum for Bitcoin, but a shift in investor confidence is indicated by decreasing long-to-short ratios. As such, Bitcoin’s market structure is bearish, and a $25,500 support retest is the most likely outcome.

OKX traders’ margin-lending ratio spiked on June 5 after Bitcoin crashed by 7% to $25,500, with long positions favoured. However, the ratio adjusted slightly on June 6, with additional margin deposits but forced long exposure reductions. The OKX ratio is highly unusual and unsustainable, reaching 62 favouring longs. Investors should also monitor the Bitcoin futures long-to-short metric for discrepancies between exchanges.

Both OKX’s and Binance’s top traders reduced their long-to-short ratios between June 7 and June 8, indicating a lack of confidence. As such, Bitcoin’s market structure is currently bearish, with a low probability of the BTC price breaking above $27,500 in the short to medium term. This article is for general information purposes only and not for legal or investment advice.