Market sentiment has shifted; the previously held belief that a pro-crypto presidency inherently benefits the industry is no longer the primary driver. Instead, macroeconomic factors are now dictating market trends.
Spread Narrowing: The narrowing spread between CME's next-month and front-month Bitcoin futures contracts indicates a waning of the bullish sentiment following Trump's victory. This spread, calculated using continuous contracts for consistent data analysis, provides a clear market signal.
Contango Persists: Despite the spread contraction, the futures curve remains in contango, a typical market condition where longer-dated futures trade at a premium due to factors such as storage, financing, and anticipated price appreciation.
Market Dynamics: Analysts suggest the recent price movement is likely attributable to the unwinding of leveraged long positions in the spot market, rather than a broader systemic risk event. The persistent positive perpetual funding rates and contango in the futures basis support this interpretation.
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