Bitcoin (BTC) experienced a 3.4% correction over the weekend, as investors reduced their risk exposure in response to escalating global sociopolitical tensions and China's report of its slowest economic growth since 2022. The cryptocurrency's retest of the $92,000 level caught many by surprise, leading to the forceful liquidation of $215 million in leveraged BTC futures longs, raising concerns about a potential deeper price correction.
The Nasdaq index futures traded lower on Monday following U.S. President Donald Trump's announcement of additional import tariffs targeting eight European countries. These measures are intended to pressure negotiations regarding the acquisition of Greenland, a territory currently under Danish control. European nations are reportedly discussing retaliatory measures on U.S. product imports, as reported by Yahoo Finance.
Weak BTC Derivatives Indicate Fading Interest and Hedge Appeal
Investors sought refuge in cash positions and precious metals as U.S. markets remained closed on Monday due to a national holiday. The Euronext 100 Index declined by 1.6%, while gold prices surged to new highs, surpassing $4,650 for the first time. Despite Bitcoin quickly reclaiming the $93,000 level, the broader market continues to perceive cryptocurrencies as risk-on assets rather than alternative hedges.
The annualized premium of Bitcoin futures, also known as the basis rate, remained near the neutral-to-bearish 5% level. This suggests that the demand for leveraged bullish positions was not significantly impacted by the failed attempt to reclaim $98,000 on Wednesday. However, the subdued activity in BTC derivatives markets may signal a decrease in interest from institutional investors.
Bitcoin spot exchange-traded funds (ETFs) recorded net outflows totaling $395 million on Friday, further dampening trader sentiment. With gold and silver prices reaching all-time highs, Bitcoin's attractiveness as a hedge appears diminished. Consequently, professional traders are demanding higher premiums to offer downside protection.
The BTC options delta skew at Deribit increased to 8%, indicating that put options are trading at a premium. Under normal market conditions, this indicator typically fluctuates between -6% and +6%. The recent downturn in Bitcoin's price has evidently reduced the confidence of large holders, often referred to as whales, in a bullish breakout above $100,000. Macroeconomic factors continue to dominate headlines and influence traders' risk appetite.
George Saravelos, head of FX research at Deutsche Bank, observed that European countries hold $8 trillion in U.S. bonds and equities, which is nearly double the amount held by the rest of the world combined. He noted that the U.S. fiscal imbalance relies on sustained capital inflows. Therefore, Europe may become less willing to support the U.S. dollar if the "western alliance" faces existential disruption.
China's economy grew by 4.5% year-over-year in the final quarter of 2025, a decrease from the 4.8% growth in the preceding quarter. Strong exports helped to mitigate weaker consumer spending and business investment, according to the Associated Press. Analysts caution that stimulus policies introduced in 2025 might be scaled back, and a global trade war could negatively impact exports.
Network Activity and Investor Outlook
Declining Bitcoin network activity has also raised concerns, as robust blockchain demand is crucial for supporting investment in mining operations. Bitcoin miner revenue comprises a fixed block reward of 3.125 BTC along with transaction fees. Daily active addresses have fallen to 370,800, a decrease of 13% from two weeks prior, according to data from Nansen.
Considering the weakness observed across various BTC derivatives metrics, there are limited indications that the $92,000 support level will hold. Investors remain cautious about a potential global economic slowdown and the implications of the U.S. administration's focus on acquiring Greenland and its current involvement in Venezuela.