The price trend of Bitcoin (BTC) experienced a pullback as June approached. As of 4 PM on June 3, Bitcoin was reported at around $105,200, a decline from its recent high of approximately $112,000. The current market environment presents both opportunities and risks for retail traders.
From a technical perspective, significant volatility may occur in the future, but institutional investors remain cautiously optimistic. Bitfinex Alpha also pointed out in a recently released report that Bitcoin is undergoing a healthy consolidation phase, although market volatility still exists.
Bitcoin price 4-hour candlestick chart. Source: Gate.io
On-chain data suggests market exuberance, and volatility may rise.
The Bitfinex Alpha report indicated that the current market pullback is primarily due to a shift in momentum and an increase in macroeconomic pressures. The U.S. government's unexpected reimplementation of tariff policies has pushed the 30-year U.S. Treasury yield above 5%, triggering a rise in market risk aversion. In this macro context, Bitcoin's price trend has been affected, and signs of overheating have appeared in its derivatives market.
Data shows that the total open interest in Bitcoin options has surged to $49.4 billion, setting a new historical record. This figure reflects a continued increase in institutional participation and indicates that hedging and speculative activities in the market are intensifying. The market's expectations for future volatility are rising, likely driven by increased macro uncertainty and some investors taking profits.
Additionally, on-chain data indicates that Bitcoin is currently in a region often regarded as "extremely exuberant," which typically precedes significant market volatility. Although the price has recently declined, Bitcoin's overall structural fundamentals remain solid, suggesting that this adjustment is more likely a healthy correction rather than a signal of a trend reversal or crash.
Currently, the U.S. economy is facing multiple challenges, including trade frictions, weak consumer spending, and uncertainty in the policy environment. Consumer spending is slowing, with households more inclined to increase savings and reduce non-essential expenditures. While inflation remains moderate, businesses have begun passing on costs from rising tariffs to end consumers, which could impact future inflation trends.
Institutional investors are undeterred by the pullback and continue to accumulate Bitcoin assets.
Despite Bitcoin's retreat from its peak and signs of weakened momentum in the short term, institutional investors remain steadfast, continuously increasing their Bitcoin holdings through compliant channels.
For instance, Russia's largest bank, Sberbank, launched a new structured bond product this week, allowing qualified investors to indirectly gain Bitcoin-related returns. This product is currently issued to specific qualified investors through the over-the-counter market, with returns linked to the performance of Bitcoin against the U.S. dollar, while also covering potential appreciation in the USD/RUB exchange rate. Investors do not need to open cryptocurrency wallets or use overseas exchanges, as all transactions are settled in rubles.
Additionally, MicroStrategy, known as Wall Street's "most aggressive Bitcoin holder," announced on June 2 that the company plans to issue $250 million in convertible preferred stock to raise funds for further Bitcoin purchases. Based on the current market price of Bitcoin, this $250 million could allow MicroStrategy to acquire approximately 2,351 additional Bitcoins.
According to publicly available information from MicroStrategy, the company currently holds 580,955 Bitcoins, valued at over $6.17 billion. Data from BitcoinTreasuries.NET also shows that MicroStrategy's Bitcoin holdings exceed the total of more than 117 other publicly traded companies that hold Bitcoin.
Followers of MicroStrategy's Bitcoin strategy, Japan's Metaplanet, have also increased their Bitcoin holdings during this pullback. According to its latest disclosure in June, the company recently acquired 1,088 Bitcoins at an average price of $108,400, totaling an investment of $117.9 million. The company now holds a total of 8,888 Bitcoins, with an average purchase cost of $93,354.
Over the past 12 months, the company's Bitcoin investment strategy has yielded a 225% return, benefiting from which the company's stock price has also surged nearly 200% in the past month.
Summary:
The overall trend of Bitcoin still shows a strong bullish momentum. Since bottoming out at $74,000, the price has continuously set new highs and lows. The current adjustment is viewed as a normal retracement within the trend, potentially indicating that a new higher low is forming. Only if trading volume significantly increases and the price falls below $104,300 would this optimistic outlook be shaken.
Related: Bitcoin (BTC) must upgrade within five years, or it will face quantum computing threats.
Original article: “Institutions Keep Buying Bitcoin Despite Recent Pullback”
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