US equities and crypto markets shifted dramatically on April 9 after US President Donald Trump announced a 90-day pause on his reciprocal tariffs, except for China. Bitcoin BTCUSD price responded by surging by 5% in less than an hour, reclaiming the $83,000 level which was last seen on April 6.
While the S&P 500 gained 8%, Bitcoin derivative metrics have yet to turn bullish as traders remain cautious about changes in US long-term government bonds.
The BTC futures premium briefly rose above the neutral 5% threshold but failed to sustain its momentum. Investors were skeptical about whether the US Federal Reserve would lower interest rates throughout the year. However, this indicator has moved away from the 3% level observed on March 31, signaling growing confidence among Bitcoin bulls after several failed attempts to push prices below $76,000.
Bitcoin traders worry after 10-year yield volatility
Traders’ hesitancy can partly be attributed to the April 9 release of minutes from the Federal Reserve Committee (FOMC) meeting held on March 18-19. The minutes highlighted concerns about stagflation. According to CME FEDWatch Tool data, the probability of the Federal Reserve reducing interest rates below 4% by Sept. 17 dropped from 97.6% on April 8 to 69.7% on April 9.
Traders are worried about the implications of a weakened 10-year US Treasury yield. This decline reflects reduced confidence in the government’s ability to manage its growing debt. Economist Peter Boockvar, editor of The Boock Report, explained to Yahoo Finance: “We can draw a line at around the 4.40% level in the 10-year yield.” He added that investors fear “foreigners will continue to reduce their holdings of US Treasurys.”
When bond yields rise, it indicates that buyers are demanding higher returns from the US government. As a result, the cost of rolling over debt increases, potentially creating a negative cycle that weakens the US dollar. This uncertainty in the macroeconomic environment has also been reflected in Bitcoin options markets.
Bitcoin derivatives signal a lack of conviction from bulls
When traders anticipate a market correction, put (sell) options typically trade at a premium, pushing the 25% delta skew (put-call) metric above 6%. On the other hand, during bullish periods, this indicator usually drops below -6%.
On April 9, the Bitcoin options delta skew peaked at 12% after China announced higher tariffs in retaliation. However, this trend reversed completely following President Trump’s announcement of a tariff pause, with the indicator returning to a neutral 3%. This shift suggests that options markets are now pricing equal probabilities for upward and downward price movements, marking the end of a bearish phase that began on March 29.
To determine whether this lack of bullish sentiment is limited to monthly futures and options markets, one can examine leverage demand in perpetual futures (inverse swaps). These contracts closely follow spot prices but rely on an 8-hour funding fee. In neutral markets, this funding rate typically ranges between 0.4% and 1.4% over a 30-day period.
On April 9, the 30-day Bitcoin futures funding rate rose to 0.9%, its highest level in over six weeks. This increase likely reflects retail buyers entering the market but remains within the neutral range. This consistency across BTC derivatives metrics suggests that the tariff pause was insufficient to restore confidence, especially as tensions in the trade war with China persist.
It remains unclear what will drive Bitcoin traders to adopt a bullish stance, but reduced macroeconomic uncertainty—such as a decline in the US 10-year Treasury yield—will likely play a critical role.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
