This week presents potential stumbling blocks for Bitcoin, closely tied to the evolving global economic conditions. The beginning of the week saw Bitcoin slipping below the crucial $94,000 threshold. This downturn appears connected to possible tariff abatements and rising US-EU tensions. The pressing question remains whether on-chain data signals any rekindling of investors’ desire for risk.
What is driving the cryptocurrency decline?
Experts observe a negative trajectory for cryptocurrencies this week, largely propelled by intensifying tariff disputes between the US and the EU. The Supreme Court is set to disclose its stance on tariffs shortly, further complicating the financial landscape. Despite this volatile backdrop, significant fluctuations in the PCE ahead of the Federal Reserve’s interest rate decision seem improbable. Strong employment statistics lessen the likelihood of rate cuts, rendering inflation metrics less impactful.
During the midterm election phase, there were hopes pinned on former President Trump crafting a market-friendly environment. Yet, ongoing debates about Greenland diminish those prospects. Cryptocurrencies, naturally sensitive to risk assessment, have responded with an early-week downturn.
Is risk appetite within the cryptocurrency sector truly waning?
According to CryptoQuant expert Darkfost, Bitcoin’s open positions are key to understanding shifts in risk appetite. Notably, futures markets currently overshadow spot and ETF markets, encompassing the lion’s share of Bitcoin trading. The focus on open positions provides essential insights into market sentiment.
Highlighting market dynamics, Darkfost emphasizes,
Binance stands as a pivotal entity, controlling 36% of total open positions, thus vital for market tracking.
Since the latest all-time high, Bitcoin has corrected by approximately 36%, influenced partly by reduced leverage in derivatives. Open positions have declined from 381,000 BTC to around 314,000 BTC, evident in a 17.5% contraction.
Following the correction in April 2025, with open positions steadying near 300,000 BTC and Binance’s hold dropping to 26%, the futures market gradually bolstered its position base. Roughly 80,000 BTC made their way back into these markets, supporting an ascending trend, aiding in reaching another peak.
- •Open positions emphasize BTC measurements over USD to neutralize price volatility.
- •A steady uptrend in open positions marks a cautious resurgence in risk appetite.
- •Momentum in positions suggests Bitcoin is on course to recapture the $94,000 mark.
Risk appetite seems to be on a slow mend, contrasting with previous year’s withdrawal patterns. This steady uptick implies Bitcoin is positioned to approach the $94,000 level once more, holding promise for further gains.