Bitcoin's price remains stubbornly below $70,000, with a recent development in BTC's funding rate sending a clear signal. The annualized BTC futures funding rate briefly turned negative, indicating that bullish traders currently lack the conviction to use leverage. This is a significant development, as under neutral conditions, this indicator typically ranges between 6% and 12%. The lack of conviction from bulls has been evident for the past week, and the recent dominance of precious metals has further dampened Bitcoin investors' enthusiasm. Silver and gold have emerged as clear winners over the past two months, while the stock market has entered a consolidation period. The tech sector's gains have come to a standstill, with some analysts arguing that valuations have become excessive, while others claim efficiency gains from AI are finally paying off. Regardless of the outcome, investors have sought protection in government bonds, with yields on the 10-year US Treasury declining to their lowest levels since November 2025, signaling increased demand. This trend does not necessarily reflect higher confidence in the Federal Reserve's strategy to avoid a recession without fueling inflation. In fact, the US dollar has weakened against a basket of foreign currencies, as reflected in the DXY index. The uncertainty in the tech sector has pushed investors toward more risk-averse behavior, with revenues from AI investments unlikely to pay off in the next couple of years, according to some experts. This has led to a cautious approach in the Bitcoin options market, where demand for neutral-to-bearish strategies using BTC options has stagnated over the past week. The panic following the unexpected crash to $60,200 on February 6 has largely subsided, yet traders are still far from flipping bullish. The BTC options put-to-call ratio at Deribit stood at 0.8x on Monday, indicating balanced demand between put (sell) and call (buy) instruments. While it will likely take a couple of weeks for bulls to regain full confidence, Bitcoin derivatives metrics currently show no signs of panic among market participants. However, establishing sustainable bullish momentum will likely depend on a reduction in macroeconomic uncertainty.
