Bitcoin spot prices are stable but traders have doubts about the trend after the unanticipated drop on June 11th. Bitcoin’s price is currently stable and trending upwards, despite the gains made on June 12th.
Even at this point, the coins, despite the general confidence, remain below $72,000. This line of reaction is becoming a major liquidation point. BTC can cause a surge of liquidation if it is broken. This could accelerate the launch to $74,000.
What will happen to Bitcoin demand in the spot market?
On-chain analyst takes on X said Bitcoin’s spot price is below $72,000 due to hedge fund shorting futures.
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The Chicago Mercantile Exchange has seen hedge funds increase their BTC-short positions by $1 billion over the course of the last week.
Analysts say that to counter this and stabilize prices, two factors must occur. The CME BTC shorting is not necessarily bearish, but hedge funds use a complex arbitrage strategy to protect themselves. Coin holders should look at the fundamentals.
Hedge funds short BTC futures at CME while simultaneously buying them on the spot markets. The analyst stated that in order for the coin’s price to surpass $72,000 on the CME and reach $74,000 the users need to purchase at least two times the number of BTC futures they have shorted.
BTC price must drop for short-sellers to exit
Bitcoin must fall if spot prices are not going to rise. In this instance, falling prices encourage hedge funds to sell their short positions, lest they have to continue paying funding rate. When futures prices start to decline in a market that is bearish, the shorts must compensate longs to keep their index from deviating.
If there is a surge in demand for Bitcoin on the spot markets, it remains to see. What’s clear is the institutional interest for Bitcoin, but only from hedge funds who arbitrage their trades using Bitcoin. CMEProfits will be made regardless of the price fluctuations.
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Analysts also shared The trader used another chart to reinforce the bullish outlook. The trader made use of the “Growth Rate” The market capitalization of Bitcoin and the realized cap can be compared using this metric.
The metric currently stands at 0.001, which is below 0.002, so the market may be overheated. Bulls may be getting ready to return.
DALLE – Featured image, TradingView chart
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Source: www.newsbtc.com
