Bitcoin futures premium hits 7-week high: is the rally sustainable?
Bitcoin flirted with $70,200 on June 3, but traders fear excessive leverage might be a double-edged sword.
Bitcoin (BTC) gained 2.5% on June 3 to $69,400, sparking hopes that it might reclaim the $69,000 support level for the first time in 11 days. This positive price movement coincided with a surge in the Bitcoin futures premium to its highest level in seven weeks. But what does this mean for the sustainability of Bitcoin’s rally toward $70,000?
Some analysts believe that Bitcoin’s recent price jump was partly influenced by GameStop’s (GME) impressive 36% rally. This surge in GameStop stock rekindled memories of the 2021 anti-traditional finance sentiment when retail investors banded together to challenge the status quo. This sentiment appears to have spilled over into the memecoin sector as Floki gained 16.5%, Dogwifhat (WIF) 9%, and Bonk rallied 7.5%.
Additionally, comments from the Federal Reserve Bank (Fed) of Minneapolis’s Neel Kashkari have added to the uncertainty. The Fed official stated that he doesn’t foresee a rate cut anytime soon, citing Americans’ strong aversion to inflation. This stance, although not universally shared among Fed officials, is seen as negative for the housing and stock markets. As a result, some investors are turning to alternative investments like Bitcoin.
Bitcoin flirted with $70,200 on June 3, but traders fear excessive leverage might be a double-edged sword.
Bitcoin (BTC) gained 2.5% on June 3 to $69,400, sparking hopes that it might reclaim the $69,000 support level for the first time in 11 days. This positive price movement coincided with a surge in the Bitcoin futures premium to its highest level in seven weeks. But what does this mean for the sustainability of Bitcoin’s rally toward $70,000?Some analysts believe that Bitcoin’s recent price jump was partly influenced by GameStop’s (GME) impressive 36% rally. This surge in GameStop stock rekindled memories of the 2021 anti-traditional finance sentiment when retail investors banded together to challenge the status quo. This sentiment appears to have spilled over into the memecoin sector as Floki gained 16.5%, Dogwifhat (WIF) 9%, and Bonk rallied 7.5%.Additionally, comments from the Federal Reserve Bank (Fed) of Minneapolis’s Neel Kashkari have added to the uncertainty. The Fed official stated that he doesn’t foresee a rate cut anytime soon, citing Americans’ strong aversion to inflation. This stance, although not universally shared among Fed officials, is seen as negative for the housing and stock markets. As a result, some investors are turning to alternative investments like Bitcoin.Read more