Bitcoin has repeatedly failed to breach the US$65K mark, indicating a potential resistance level.
Santiment analysts observe capital moving from Bitcoin to altcoins, seeking higher yields.
Analysts Point to Returning “Appetite” for Bitcoin Amid Change in Market Sentiment
Significant drops in Bitcoin open interest suggest traders anticipate a market peak and are selling.
Bitfinex notes increased risk appetite and potential interest rate cuts following Powell’s speech.
Bitcoin has been struggling to break through the US$65K (AU$95.8K) mark in the past weeks, twice peaking just below at US$64,791 (AU$95,577) and US$64,789 (AU$95,574). In a recent post on X, Santiment analysts suggest a nuanced response to the recent Bitcoin and altcoin market movements.
They highlight a possible “rotation of capital from Bitcoin into altcoins”, as traders seek higher returns by diversifying risks away from Bitcoin and towards altcoins like ETH and SOL.
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They further suggest that the significant drop in Bitcoin’s open interest relative to smaller assets could signal that traders are anticipating the end of the recent market rebound and may be attempting to capitalise on peak prices.
Market Dynamics Signal Increased “Appetite” for BTC
Analysts at Bitfinex however said the recent crypto rally coincided with a notable increase in the positive correlation between Bitcoin and US equities, signalling a renewed risk appetite in the market.
Looking through the macro lens, the analysts said that Jerome Powell’s recent speech suggests forthcoming changes in monetary policy, primarily due to labour market dynamics showing signs of a slowdown, which may lead to interest rate cuts.
Other notable macro-level events according to the analysts are that China secured the extradition of a suspect involved in a US$14 billion (AU$20.65 billion) crypto pyramid scheme from Thailand, Franklin Templeton’s expansion of its blockchain presence by integrating its on-chain money market fund into the Avalanche network and finally BlackRock’s iShares Ethereum Trust (ETHA) which has just surpassed $1 billion (AU1.47 billion) in net inflows.Analysts Point to Returning “Appetite” for Bitcoin Amid Change in Market Sentiment
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