The Bitfinex report indicated that Bitcoin could continue its downward trend according to current indicators.

The price of Bitcoin actually tested the level below $60,000 in the past few hours, but the currency returned to the rise and rose above the level of $60,000, which it is still trading at at the time of publishing this article.

The decline in the price of Bitcoin came in conjunction with continued outflows from exchange-traded funds (ETFs) in the United States at the beginning of the new week.

According to the latest weekly report from cryptocurrency trading platform Bitfinex, US spot bitcoin ETFs lost more than $100 million per day over the past week, with a total of $544.1 million in mass outflows.

Analysts at Bitfinex explained that these flows are the result of a combination of investors’ response to short-term negative news and the unwinding of fundamental/financing arbitrage strategies due to negative funding rates.

Low open interest for Bitcoin:

The “Bitfinex” report noted that one sign of the unwinding of arbitrage strategies is the sharp decline in open interest for Bitcoin futures contracts on the Chicago Mercantile Exchange (CME) and other trading platforms.

Open interest on the Chicago Mercantile Exchange fell by $220 million over the past week, while total open interest across other platforms fell by more than $450 million in the same period.

This decline caused total open interest in Bitcoin futures to fall from its all-time high, which reached $36.99 billion on June 7, to $33.3 billion.

Analysts stated that this decline in open interest (OI) coincides with the negative funding rates observed on several exchanges over the past week, and corresponds with ETF outflows, indicating a significant unwinding of funding arbitrage trades associated with those inflows.

Therefore, it is important that not all ETF outflows are interpreted as direct spot sales.

Based on the recent “Bitfinex Alpha” report, analysts predict that Bitcoin may be approaching a bottom, as heavy outflows from ETFs are often associated with the formation of local bottoms.

When Bitcoin fell below $70,000 in early June, US Bitcoin ETFs saw seven consecutive days of net outflows, highlighting the impact of sharp price movements on ETF investor sentiment.

Analysts emphasized that this pattern is very important for investors to monitor, as it often provides clues to potential reversals or stability points within the market.

Posted using Tribaldex Blog