BItcoin hits 6-month low as AI fears add to risk-off mood: How are pro traders positioned?
Key takeaways:
Bitcoin softened as tech sector weakness spilled into crypto markets, reducing risk appetite and limiting demand for bullish leverage.
Persistent spot Bitcoin ETF outflows and targeted sales from a 2011 holder exacerbated downward pressure.
Bitcoin (BTC) is down 11% since Monday, falling to a six-month low of $94,590 on Friday. Bitcoin derivatives continue to signal weakness, even as several large tech names posted similar declines during the week. Traders are now asking whether the market has already found a floor and what must happen before confidence returns.
The pullback erased $900 million in BTC leveraged long positions, equal to less than 2% of total open interest. Despite the size of that figure, the abrupt price move barely dented the broader market. For comparison, the cascading liquidations on Oct. 10, worsened by very thin liquidity, triggered a 22% drop in BTC futures open interest.
Concerns about upward inflation pressure resurfaced after US President Donald Trump announced his intention to cut tariffs to alleviate high food costs. Mohamed El-Erian, chief economic adviser at Allianz, told Yahoo Finance that recession risks have increased as the “lower ends of the income distribution for households” struggles with the “affordability crunch.” Contagion could spread through the broader economy, El-Erian warned.
The BTC futures premium held near 4% on Friday, unchanged from the prior week. Although still below the 5% neutral line, the metric moved off the 3% lows seen earlier this month. Demand for bullish leverage remains muted, but that does not mean bears hold strong conviction. To gauge whether professional traders expect more downside, it helps to examine their long-to-short ratios.
Whales and market makers increased their long positions at Binance since Wednesday, buying the dip as Bitcoin slid below $100,000. In contrast, OKX whales cut their bullish exposure at a loss after the $98,000 support level failed on Friday. Even so, professional traders appear more optimistic now than they were on Tuesday.
AI-sector worries drive correction as traders derisk amid economic uncertainty
Part of the recent risk market correction was driven by worries in the artificial intelligence sector, which had been a major positive force for stocks. Legendary investor Michael Burry questioned whether lengthening depreciation schedules for computing equipment has artificially boosted earnings momentum. Amazon was the only major tech company that recently shortened its depreciation calendar.
The two-day $1.15 billion net outflows in Bitcoin spot exchange-traded funds (ETFs) in the US weighed on sentiment, even though the amount represents less than 1% of their assets under management. On top of that, selling pressure from a single 2011 Bitcoin holder added to fear and uncertainty. Analysts noted that the event was isolated and does not reflect a broader trend.
The BTC options delta skew stood at 10% on Friday, nearly unchanged from the prior week. Although above the neutral 6% mark, the market’s options-based fear gauge is still far below the 16% peak from last month. Given that Bitcoin has dropped 24% from the all-time high, one could argue that the options market has shown resilience.
Multiple companies valued at $20 billion or more have posted losses of 15% or greater since Nov. 5, including CoreWeave (CRWV), Ubiquiti (UI), Nebius Group (NBIS), Symbiotic (SYM) and Super Micro Computer (SMCI). The odds suggest traders will continue to derisk and favor cash until there is more clarity on the economic outlook. As a result, Bitcoin’s price may remain under pressure.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.