Markets
Bitcoin Futures Suggest Another Market Correction After FOMC Meeting
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Bitcoin perpetual futures markets are currently experiencing high funding rates, signaling a premium for long positions and further correction for spot prices, according to “Bitfinex Alpha” reports last edition.
Rising CME Bitcoin futures open interest, reaching $11.4 billion on June 4, parallels March’s all-time highs before a notable price correction. Traders appear to be taking advantage of the basis arbitrage opportunity by selling Bitcoin on the open market and gaining spot exposure through ETFs, with the aim of profiting from futures and price discrepancies in the spot market.
Despite 20 consecutive days of ETF inflows since May 10, potential disruptions arise with the upcoming US Consumer Price Index report and the US Federal Open Market Committee’s interest rate discussions set to take place this week.
Last week, the price of Bitcoin fluctuated, reaching over $71,500 and then correcting to local lows around $68,500. Top altcoins suffered declines, with Ethereum (ETH) and Solana (SOL) falling 7.5% and 12.1%, respectively.
The recent “leverage flow” has seen significant liquidations in leveraged altcoin long positions, with data from Coinglass showing Bitcoin open interest at an all-time high of $36.8 billion on June 6.
However, short-term holders increased their Bitcoin activity, with holdings peaking at 3.4 million BTC in April. Long-term holders, on the other hand, are showing confidence by accumulating Bitcoin, with the dormant supply for one-year holders remaining stable.
Bitcoin whales are also on an accumulation spree, with their balance reaching a new all-time high.
Therefore, while derivatives data suggests a short-term price pullback, factors such as increased ETF buying activity, reduced selling pressure from long-term holders, and improved liquidity could potentially catalyze the upward movement of the ETF. Bitcoin in the long term.
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