With risk assets in the financial sector beginning to look vulnerable, experts are pointing out economic factors that could potentially push bitcoin into a “slow bleed environment.” A recent Bitfinex Alpha report highlighted concerns that United States authorities may not cut interest rates soon, which have impacted assets like bitcoin. Despite a drop in price last week after stronger-than-expected jobs data was released, bitcoin remained resilient due to ongoing inflows into the U.S. spot Bitcoin ETF market.
The ongoing inflows into U.S. spot Bitcoin ETFs, which have been on a 19-day streak until recently, have been crucial in supporting bitcoin’s price. However, this trend may face disruption in the coming week, with potential inflation signals emerging after the U.S. Consumer Price Index report and the upcoming U.S. Federal Open Market Committee meeting on interest rates. These economic signals could potentially shift bitcoin into a ranging or slow bleed environment, according to Bitfinex.
In addition to economic reports and meetings, high funding rates in bitcoin perpetual futures markets suggest that traders are paying a premium to open long positions. With rising bitcoin CME futures open interest and ongoing ETF inflows, traders are taking advantage of the arbitrage opportunity between futures and spot markets. Despite a price correction on Friday, bitcoin OI across major crypto exchanges hit an all-time high of $36.8 billion on June 6, with current OI remaining above $36 billion.
Although positive ETF flows have helped offset pressure on bitcoin, the asset has struggled to surpass its range high. Before the price drop on Friday, bitcoin reached a range high exceeding $71,500 for the first time since May’s low deviation below $57,000. While a major decline is not expected in the immediate future, bitcoin’s inability to break past its range highs remains a point of concern for market experts.
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