Despite Bitcoin (BTCThe price of reaching its highest level in over three weeksBitfinex’s traders have reduced the leveraged (bullish), long margin positions by over $100,000,000 between April 17 and 19.
This drop has led some to speculate that Bitcoin whales are anticipating a correction in price or at least not optimistic about further gains on the short term. We’ll examine this more closely to see if it is true.
Bitfinex Bitcoin whales are still bullish
Bitcoin has risen above $86,000 after US President Donald Trump publicly announced his intention to ban the use of Bitcoin. discussed the possibility of replacing Jerome Powell is the Federal Reserve Chairman. Trump criticised Powell for failing to act quickly enough to ease the monetary policy.
Investors are also becoming more risk-averse due to the growing concern about a global recession, especially as the trade war intensifies. US-China relations.
This profit-taking is particularly noteworthy as Bitcoin has been below $90,000. Since early March this price remains unchanged, leading some investors to doubt the possibility of a sustained decoupling. traditional markets.
The S&P 500 index futures are trading 1.1% below their closing price on April 17, and rising political tensions in the US are further eroding investor sentiment.
Bitfinex Bitcoin longs were flat between 10 April and 17 April, showing a high level of confidence by bullish traders. The price was approaching a seven-month peak. These traders reduced their bullish leveraged positions even though BTC regained the $83,000 mark. This is equivalent to $106 million.
Bitfinex is known to have traders who quickly open or close substantial Bitcoin margin positions. This indicates that large arbitrage firms and whales typically drive such movements.
It is still not correct to say that Bitfinex’s whales are now bearish, as their current margin longs total 79.136 BTC valued at $6.86 Billion, whereas margin shorts only amount to 326 BTC.
Related: Bitcoin whales absorb 300% of newly mined BTC supply — Is $100K next?
It is the platform’s low annual interest rate of 2% that accounts for this significant difference in bullish and negative positions. Comparatively, those who use 2-month BTC Futures pay an annualized premium of 5.7%.
The disparity between the two is a problem opportunities for arbitrageAs one can buy Bitcoin futures in order to take advantage of the differences, and sell the same position at the margin market.
BTC rarely moves with Bitfinex’s leverage changes
Moreover, Bitcoin’s prices does not always directly correlate with the changes in leveraged position on Bitfinex. Whales, for example, increased their long margins of 13,454 BTC in the last two weeks before March 10. Yet, Bitcoin’s value dropped from $95,930 down to $67,000 during that same time period.
Margin longs also decreased by 11 047 BTC over the course of two weeks, ending on Dec. 16 2024. Meanwhile, Bitcoin’s value rose from $96 200 to $106 400.
These sophisticated investors, however, have shown strong timing of the market over a longer period. Bitcoin, for example, dropped to below $58,000 in December 2024 after the margins of long positions were reduced by 26 percent over 30 days.
These traders have shown a high level of profitability, as well as displaying a much higher level of risk tolerance and patient than average investors.
Finaly, the $106,000,000 reduction in BTC long margins does not prove that professional traders have turned bearish.
Cointelegraph reportedData from onchain suggests that Bitcoin whales grew in number despite the fall of prices throughout April and March, indicating an accumulation.
This is not intended as an investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.
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Source: cointelegraph.com
