On April 9, there was a significant shift in US equities and cryptocurrency markets following US President Donald Trump’s announcement of a 90-day suspension on reciprocal tariffs, excluding those on China. The price of Bitcoin BTCUSD reacted quickly, soaring by 5% in under an hour, once again reaching the $83,000 mark that was last recorded on April 6.
The S&P 500 increased by 8%, yet Bitcoin derivative indicators have not turned positive, as traders remain apprehensive about fluctuations in long-term US government bonds.
The premium on BTC futures briefly exceeded the neutral 5% mark but could not maintain this upward trend. Investors expressed doubt regarding whether the US Federal Reserve would lower interest rates throughout the year. Nonetheless, this indicator has shifted away from the 3% level observed on March 31, suggesting increasing confidence among Bitcoin bulls following multiple unsuccessful attempts to drive prices beneath $76,000.
Concerns Rise Among Bitcoin Traders After Yield Volatility
The hesitance of traders can be linked to the release of minutes from the Federal Reserve Committee (FOMC) meeting dated March 18-19. The minutes raised alarms about stagflation. As per CME FEDWatch Tool data, the likelihood of the Federal Reserve reducing interest rates below 4% by September 17 fell dramatically from 97.6% on April 8 to 69.7% on April 9.
There are concerns among traders regarding the implications of a declining 10-year US Treasury yield, which suggests diminished confidence in the government’s ability to handle its escalating debt. Economist Peter Boockvar, editor of The Boock Report, mentioned to Yahoo Finance: “A line can be drawn at approximately the 4.40% level in the 10-year yield.” He further voiced apprehensions about “foreign entities continuing to decrease their US Treasury holdings.”
When bond yields increase, it signifies that buyers expect higher returns from the US government. Consequently, the costs associated with debt rollover may rise, potentially triggering a negative feedback loop that weakens the US dollar. This uncertainty in the macroeconomic landscape has also been mirrored in Bitcoin options markets.
Bitcoin Derivatives Indicate Hesitancy Among Bulls
In anticipation of a market correction, put (sell) options generally trade at a premium, pushing the 25% delta skew (put-call) metric above 6%. Conversely, during bullish periods, this metric typically falls below -6%.
On April 9, the Bitcoin options delta skew peaked at 12% after China announced increased tariffs in retaliation. However, this trend reversed entirely following President Trump’s declaration of a tariff pause, causing the metric to return to a neutral 3%. This change implies that the options markets are now anticipating equal chances for both upward and downward price movements, signaling the cessation of a bearish phase that commenced on March 29.
To assess whether the absence of bullish sentiment is confined to monthly futures and options markets, it is beneficial to examine the demand for leverage in perpetual futures (inverse swaps). These contracts closely mirror spot prices but depend on an 8-hour funding fee. Typically, in neutral markets, this funding rate falls between 0.4% and 1.4% over a 30-day timeframe.
On April 9, the 30-day Bitcoin futures funding rate hit 0.9%, its highest point in more than six weeks. This uptick likely signifies that retail buyers are entering the market but remains within a neutral level. The consistency across BTC derivative metrics suggests that the tariff pause did little to reinstate confidence, especially as trade tensions with China continue.
It remains uncertain what factors will motivate Bitcoin traders to adopt a bullish outlook; however, a reduction in macroeconomic uncertainty—such as a drop in the US 10-year Treasury yield—will likely be a determining factor.
This article is intended for informational purposes and should not be interpreted as legal or investment advice. The perspectives and opinions presented here are solely those of the author and do not necessarily align with the views of Cointelegraph.
