As a seasoned crypto investor with a few years under my belt, I’ve seen my fair share of market volatility. The recent downtrend in Bitcoin (BTC), which has dipped below $60,000 and hit new local lows, is a reminder of the rollercoaster ride we’re all on.
As a crypto investor, I’ve noticed that Bitcoin (BTC) has been on a downtrend lately, hitting new local lows below $59,000 during the US Monday trading session. In fact, BTC even dipped briefly below the psychologically significant level of $60,000 to reach a new low of $58,500 in the mid-hours.
The persistent slump in the market shows no signs of letting up, with significant outflows from the U.S. Bitcoin ETF market continuing into the new week.
As a crypto investor, I’ve closely followed Bitfinex’s weekly report, which revealed that U.S. Bitcoin spot ETFs experienced significant outflows last week, totaling over $544 million. This equates to approximately $100 million in daily losses. The analysts at Bitfinex attributed these outflows to two primary factors:
Bitcoin Open Interest Declines
Based on Bitfinex’s analysis, a significant decrease in open interest for Bitcoin futures contracts on the Chicago Mercantile Exchange (CME) and other exchanges may indicate the unwinding of basis and funding arbitrage positions.
In the past week, the open interest for Bitcoin futures on CME decreased by approximately $220 million. Meanwhile, open interest across all other platforms combined saw a significant drop of over $450 million. As a result, the total Bitcoin futures open interest has dropped from its record high of $36.99 billion on June 7 to $33.3 billion.
Analysts noted that the recent decrease in Open Interest (OI) on derivatives contracts coincides with negative funding rates across multiple exchanges over the past week. This trend aligns with ETF net redemptions, indicating a significant unwinding of funding arbitrage trades linked to ETF inflows and outflows. It’s essential to remember that not every ETF withdrawal equates to direct selling in the spot market.
Bitcoin Could be Nearing Its Bottom
According to the latest Bitfinex Alpha analysis, it’s suggested that Bitcoin (BTC) might be approaching its lowest point. This is due to the significant ETF redemptions, a trend similar to what occurs prior to the creation of local market bottoms.
During the early June slump when Bitcoin’s price dipped beneath $70,000, US Bitcoin spot ETFs experienced seven consecutive days of withdrawals, illustrating how volatile price changes can influence investor confidence in these financial products.
Analysts pointed out that this pattern is essential for investors to keep an eye on, as it frequently signals upcoming reversals or indicators of market stability.
Currently, Bitfinex analysts are issuing a cautionary note, indicating that investor attitude towards cryptocurrencies remains pessimistic. This is due in part to noticeable weakness observed on the shorter timeframes (ranging from one minute to 15 minutes) across various crypto assets.
Read More
- W PREDICTION. W cryptocurrency
- AAVE PREDICTION. AAVE cryptocurrency
- PENDLE PREDICTION. PENDLE cryptocurrency
- ZETA PREDICTION. ZETA cryptocurrency
- AEVO PREDICTION. AEVO cryptocurrency
- FutureNet Co-Founder Roman Ziemian Arrested in Montenegro Over $21M Theft
- CEL PREDICTION. CEL cryptocurrency
- CTSI PREDICTION. CTSI cryptocurrency
- USD HUF PREDICTION
- EUR PHP PREDICTION
2024-06-25 09:46