After briefly retesting the $25,000 support on June 15, Bitcoin gained 6.5% as the bulls successfully defended the $26,300 level. Despite this, general sentiment remains slightly bearish as the cryptocurrency has fallen 12.7% in two months.

The Release of Binance.US Temporary Restraining Order Judge Amy Berman Jackson of the United States District Court has some to do with improving investor sentiment. On June 16, the exchange reportedly reached an agreement with the US Securities and Exchange Commission (SEC), avoiding a freeze on its assets.

Over the longer term, the global regulatory environment has been extremely damaging to cryptocurrency prices. In addition, the SEC is trying unilaterally it will mark exactly which altcoins it considers securities and in a lawsuit with two of the world’s leading stock exchanges, the European Union signed Markets in Cryptographic Assets (MiCA) Regulations. to the law on May 31. This means that crypto businesses have set timelines for implementing and meeting MiCA requirements.

Interestingly, while Bitcoin (BTC) performance was lackluster, with the S&P 500 hitting a 14-month high on June 16. Even with this recovery, JPMorgan strategists expect the rally will come under pressure in the second half of 2023 “if growth in absolute terms stalls”.

Investors will focus on the US central bank, with Federal Reserve Chairman Jay Powell testifying before the House Financial Services Committee on June 21 and the Senate Banking Committee on the morning of June 22 as part of his semi-annual testimony before lawmakers. .

Let’s take a look at Bitcoin derivatives metrics to better understand how professional traders are faring in a weaker macroeconomic outlook.

Bitcoin margin and futures show moderate demand for leveraged longs

Margin markets they provide insight into the position of professional traders as they allow investors to borrow cryptocurrencies to leverage their positions.

For example, OKX provides a margin lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy bitcoins. On the other hand, Bitcoin borrowers can only bet on the price of the cryptocurrency going down.

OKX stablecoin/BTC margin-lending ratio. Source: OKX

The chart above shows that OKX traders’ margin-to-lending ratio has been declining since June 10, suggesting that the overwhelming dominance of longs is over. The current 23:1 ratio favoring stablecoin lending still favors the bulls, but is hovering near five-week lows.

Investors should also analyze the long-to-short Bitcoin futures metric, as it does not include externalities that could impact only margin markets.

Bitcoin long to short ratio of the biggest traders on the exchanges. Source: CoinGlass

There are occasional methodological discrepancies between exchanges, so readers should watch for changes rather than absolute numbers.

On June 15, top traders in OKX significantly reduced their shorts as the price of Bitcoin fell to a three-month low of $24,800. However, these traders were not comfortable with maintaining a ratio that favored longs, and it has since moved back to a ratio of 0.80, in line with the two-week average.

The opposite movement occurred on Binance as top traders cut their long-to-short ratio to 1.18 on June 15, but then added longs and the indicator is at 1.25. Despite the improvement, the long-to-short ratio of Binance’s top traders is currently in line with the previous two-week average.

Related: Hawkish Fed, Stock Market Rally and Crypto Lagging

Bitcoin’s price gains are limited despite the resilience of derivative metrics

Overall, Bitcoin bulls lack the confidence to leverage long positions using margin and futures markets. BTC has lacked momentum as investors’ attention shifted to the stock market after the Fed decided to hold off on raising interest rates, improving the outlook for corporate earnings.

Despite the extremely negative regulatory pressure, professional traders have not changed according to Bitcoin derivatives metrics. However, the bears have the upper hand as the 20-day resistance at $27,500 strengthens, limiting short-term upside to just 3.8%.