Takeaways from the conference:
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Bitfinex’s margin longs declined 18%, even though Bitcoin prices rose 24% over the past 30 days.
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The current short positions of $25 million are dwarfed by the $6.8 billion long positions.
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Bitcoin option positioning and spot BTC flows point to institutional investor confidence.
BitcoinBTCThe price of bitcoin has risen by 23.7% in the last 30 days. Yet traders at Bitfinex reduced their leveraged positions on Bitfinex by over 18,000 BTC. Profit-taking on margin markets is causing speculation about professional traders’ confidence in current price levels of $104,000.
Bitfinex long margins fell from 80 387 BTC down to 65 889 BTC in the period between April 16th and May 16th. The shift is a change from the bullish demand for margins seen from mid-February to mid-March when Bitcoin fell from $97,000 to $82,500. It is possible that margin longs are currently decreasing as a result of healthy profits rather than the turn to bearish momentum.
This move’s reasoning isn’t entirely clear. Bitcoin’s surge above $100,000 happened on 8 May, about three weeks after margin longs reached their peak. But it is wrong to assume that Bitfinex has a negative outlook. The total margin of their long positions is now $6.8 billion. margin shorts Only $25 Million is the difference between bearish and bullish positions.
Bitfinex offers a low annual margin interest rate of 0.7%. By comparison, those who use leverage on 90-day contracts are paying a higher interest rate. Bitcoin futures You will pay a 6,3% premium annualized. Arbitrage is possible because of this gap.
To benefit from margin trading, you can sell BTC Futures and open Bitcoin Longs at the same moment. rate difference. Margin traders have also a tendency to use longer timeframes and a greater risk tolerance than investors on average, so they are less affected when price changes occur in the short term.
BTC ETFs are driving optimism, despite whales’ resistance to $105,000
In order to eliminate factors that are only limited to margin markets it is helpful to examine Bitcoin options. The 25% delta shift will rise above 6% if traders are expecting a corrective move. This metric is usually lower than -6% during bullish times.
Even though the data in recent weeks ranged between neutral and slightly bullish, the current -6% delta options skew indicates confidence in Bitcoin’s value. The market makers and whales aren’t concerned by the repeated failure to surpass $105,000.
Related: Bitcoin traders’ evolving view of BTC’s role in every portfolio bolsters $100K support
A portion of the optimism that has increased, despite a lower demand for leveraged bullish position, is due to the $2.4 billion net inflows From May 1 to May 15, US Bitcoin Exchange-Traded Funds (ETFs). The drop in Bitcoin long margins is not a sign that institutional investors are now bearish. This is especially true when looking at the BTC option markets.
The data doesn’t reveal if Bitcoin will break above $105,000 but the $6.8 Billion in leveraged long positions clearly shows professional traders are still very optimistic about price prospects.
The information contained in this article is meant to provide general knowledge and not as 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
