Bitcoin’s perpetual futures markets are currently experiencing high funding rates, indicating a premium for long positions and a potential further correction for spot prices. The latest edition of the “Bitfinex Alpha” report highlights this trend, with rising Bitcoin CME futures open interest reaching $11.4 billion as of June 4th. Traders are taking advantage of the basis arbitrage opportunity by shorting Bitcoin on the open market while gaining spot exposure through ETFs, aiming to profit from futures and spot market price discrepancies.
Despite 20 consecutive days of ETF inflows since May 10, potential disruptions are looming with the upcoming US Consumer Price Index report and the US Federal Open Market Committee’s interest rate discussions set to occur this week. Last week, Bitcoin’s price fluctuated, reaching over $71,500 before correcting to local lows around $68,500. Major altcoins like Ethereum (ETH) and Solana (SOL) also experienced declines, with drops of 7.5% and 12.1%, respectively.
The recent “leverage flush” saw significant liquidations in altcoin leveraged long positions, with Coinglass data showing Bitcoin open interest at an all-time high of $36.8 billion on June 6th. Short-term holders have been increasing their Bitcoin activity, with holdings peaking at 3.4 million BTC in April. Conversely, long-term holders are showing confidence by accumulating Bitcoin, as the inactive supply for one-year holders remains stable.
Bitcoin whales are also accumulating, with their balance reaching a new historical high. While derivatives data point towards a price pullback in the short term, factors such as increased ETF buying activity, reduced selling pressure from long-term holders, and improved liquidity could potentially drive Bitcoin’s upward movement in the long term. This accumulation trend by whales and long-term holders suggests a bullish sentiment in the market despite short-term fluctuations.
In conclusion, the current outlook for Bitcoin’s perpetual futures markets indicates a potential correction in spot prices but also presents opportunities for traders to profit from price discrepancies between futures and spot markets. Despite ongoing uncertainty surrounding economic reports and interest rate discussions, Bitcoin continues to attract investment from both short-term and long-term holders. With whales accumulating Bitcoin and long-term holders demonstrating confidence in the asset, there is the potential for Bitcoin to see upward movement in the long term. As the market adapts to changing dynamics, traders and investors should monitor these trends closely to make informed decisions.
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