Bitcoin (BTC) Analysts at Bitfinex Urge Investors to Pay Attention to Recent Data
Bitfinex analysts have conducted an evaluation of the recent decline in Bitcoin (BTC) and the significant outflows in exchange-traded funds (ETFs).
Bitcoin, the leading cryptocurrency, has been experiencing a downward trend since reaching its all-time high (ATH) in March and undergoing the halving process in April. Yesterday evening, BTC briefly dropped below $60,000, hitting a new local low of $58,500.
As the decline in BTC continues, the outflows in US spot Bitcoin ETFs have also been observed this week. Bitfinex analysts have analyzed the recent decline in BTC and the intense outflows in ETFs.
According to the analysts, the outflows and declines in BTC ETFs are due to a combination of weak-handed ETF investors reacting to short-term negative news and the unwinding of basis/funding arbitrage caused by negative funding rates.
One clear indication that the basis/funding arbitrage is loosening is the significant decrease in open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) and other trading platforms, as stated by the analysts.
They said, “This reduction in Bitcoin futures open interest coincides with the negative funding rates and ETF outflows observed on various exchanges over the past week, indicating a significant unwinding of funding arbitrage transactions associated with ETF flows.”
Regarding whether Bitcoin has reached its bottom, the analysts mentioned that despite the sales of BTC by the German government and the general market sentiment, MicroStrategy’s recent purchase of 11,931 BTC worth $786 million has provided some balance to the market. They also noted that intense ETF outflows are typically associated with the formation of local bottoms.
The analysts who believe that BTC may be approaching its bottom due to ETF outflows stated, “The intense ETF outflows did not directly translate into spot BTC sales. Additionally, historical data shows that ETF outflows often precede the formation of local bottoms in the BTC price. This pattern (ETF outflows and price declines) is critical for investors to follow because it often provides clues to potential reversals in the market.”
While ETF outflows may indicate a bottom for Bitcoin, Bitfinex analysts cautioned investors that market sentiment remains bearish as BTC and other cryptocurrencies still exhibit weakness on lower timeframes (one-minute to 15-minute charts).
*This article does not provide investment advice.
To invest in over 300 cryptocurrencies, you can register with Binance exchange and receive a 20% commission discount by using this link!
For exclusive news, analytics, and on-chain data, follow our Telegram and Twitter accounts!
Comments (0)
Name:
Email:
Comment:
Δ
