Despite a promising 5.5% intraday surge to $28,600, #BTC lost momentum this week. This setback was credited to the highly anticipated launch of #Ethereum futures exchange-traded funds (ETFs) as it failed to generate substantial trading volumes.

On top of the ETF hype settling down, recent comments from U.S. Federal Reserve representatives added to concerns about an imminent economic downturn.

Considering $BTC has been stuck between its 25,000-30,000 range for the last. 8 months, #crypto enthusiasts has been wondering why the orange coin has been struggling to break out of this range.

Macroeconomic pressures weigh on Bitcoin's price

U.S. Federal Reserve Vice Chair for Supervision, Michael Barr, expressed his anticipation, this week, of slowed economic growth due to higher interest rates restricting economic activity. The impact of the current monetary policy is yet to be fully realized, creating uncertainty.

Additionally, the real yield on U.S. 10-year Treasuries reached 2.47%, its highest level in nearly 15 years, contributing to the strength of the U.S. Dollar Index (DXY). The U.S. became a more attractive investment destination compared to Europe and China due to its resilient economy and robust growth prospects.

DXY has been rallying without a breather since mid summer.

Diminished activity for leverage Longs in Bitcoin trading

Bitcoin monthly futures usually trade at a slight premium over spot markets, implying that sellers demand higher prices, delaying settlements. This causes BTC futures contracts to maintain a 5%-10% annualized premium, a situation that can also be spotted in other financial markets.

Signaling a lack of demand for leveraged long positions, BTC futures premium continues to hover below the 5% neutral threshold. On top of this, spot trading on traditional exchanges, like #Binance has dwindled to levels not seen since late 2020.

The daily spot trading volume for Bitcoin through the years.

Crypto trading volumes has been suffering since early 2023 as retail investors continued to distance themselves from the space while prominent U.S.-based trading firms, such as Jane Street Group and Jump Trading, also did the same.

Investors' confidence in a spot BTC ETF drops

Bitcoin owes much of its 68% price gain in 2023 to the expectations of U.S. Securities and Exchange Commission (SEC) approving a spot Bitcoin ETF. While the BTC Spot ETF was delayed at every chance, $ETH futures-based ETFs on October 2nd failed to generate significant demand, causing the overall hype surrounding the ETFs.