US stocks and cryptocurrency markets experienced significant changes on April 9 following an announcement from President Donald Trump about a 90-day suspension of reciprocal tariffs, with the exception of China. The price of Bitcoin (BTC) reacted swiftly, climbing 5% in under an hour and regaining the $83,000 mark, a threshold not reached since April 6.
While the S&P 500 rose by 8%, Bitcoin derivative metrics haven’t yet reflected a bullish trend, as traders exercise caution regarding fluctuations in long-term US government bonds.
The BTC futures premium briefly surpassed the neutral 5% mark but couldn’t maintain that upward trend. Investors are wary of the possibility that the Federal Reserve may not reduce interest rates throughout the year. Nevertheless, this indicator has improved from the 3% level noted on March 31, suggesting a growing sense of confidence among Bitcoin bulls after multiple attempts to push prices beneath $76,000.
Concerns Among Bitcoin Traders After Volatility in 10-Year Yields
Trader caution stems in part from the release of minutes from the Federal Reserve Committee (FOMC) meeting held on March 18-19. The minutes raised alarms about stagflation. According to data from the CME FEDWatch Tool, the likelihood of the Fed lowering interest rates below 4% by September 17 decreased from 97.6% on April 8 to 69.7% on April 9.
Traders are also apprehensive about the implications of a declining 10-year US Treasury yield, which suggests reduced confidence in the government’s ability to handle its increasing debt. Economist Peter Boockvar commented that a yield level around 4.40% should be closely watched, expressing concerns that international investors might continue to lessen their Treasuries holdings.
When bond yields rise, it signals that buyers are seeking higher returns from the government, which in turn raises the costs of refinancing debt. This could create a negative feedback loop that undermines the US dollar. Such macroeconomic uncertainties are reflected in the Bitcoin options markets.
Bitcoin Derivatives Reveal Lack of Conviction Among Bulls
In anticipation of market corrections, put (sell) options generally command a premium, resulting in a 25% delta skew (put-call) metric that exceeds 6%. Conversely, during bullish scenarios, this figure tends to dip below -6%.
On April 9, the Bitcoin options delta skew peaked at 12% following China’s announcement of increased tariffs. However, this trend reversed after Trump announced the tariff pause, with the metric dropping back to a neutral 3%. This indicates that the options markets are now pricing in equal chances for price increases and decreases, signaling an end to a bearish phase that started on March 29.
To assess whether this lack of bullish sentiment extends beyond monthly futures and options markets, one can look at leverage demand in perpetual futures (inverse swaps). These contracts closely mirror spot prices and rely on an 8-hour funding fee. Typically, in neutral markets, this funding rate hovers between 0.4% and 1.4% over a 30-day period.
On April 9, the 30-day Bitcoin futures funding rate increased to 0.9%, marking its highest level in more than six weeks. This rise likely indicates retail buyers entering the market while still remaining within a neutral range. The consistency across BTC derivatives metrics suggests that the tariff pause hasn’t sufficiently restored confidence, particularly as trade war tensions with China continue.
What will ultimately encourage Bitcoin traders to adopt a bullish outlook remains uncertain, but a decrease in macroeconomic uncertainty, such as a drop in the US 10-year Treasury yield, is likely to play an essential role.
This article is for informational purposes only and should not be interpreted as legal or investment advice. The opinions expressed here are solely those of the author and do not necessarily reflect any official stance.