It’s too early to suggest that the market has found a bottom but two key indicators — The Tether/CNY premium and CME futures basis — have recently flipped bullish, signaling that positive investor sentiment is backing the current price recovery.
Traders should not assume that the bear trend has ended by merely looking at price charts.
Even with the current trend change, bears have reason to believe that the 3-month long descending channel formation has not been broken.
The ADP Research Institute also showed a contraction of 301,000 private-sector jobs in December, which is the worst figure since March 2020.
On the other hand, bearish markets tend to flood Tether’s market, causing a 4% or higher discount.
These fixed-calendar contracts usually trade at a slight premium, indicating that sellers are requesting more money to withhold settlement for longer.
While the CNY/Tether premium might have shown a trend shift, the CME premium reminds us that there’s a lot of distrust in Bitcoin’s capacity to function as an inflationary hedge.