- Bitcoin price is trading sideways above $41,000 on Monday, after a weeklong decline.
- Whales on a leading crypto exchange have closed their leveraged positions, leading to a significant increase in USDT reserve.
- Whale’s strategic moves usher a 21% decline in Open Interest on Bitfinex signal that a shift in BTC price trend is likely.
Bitcoin price declined throughout last week. The largest asset by market capitalization, is struggling to keep its head above volatile waters, at $41,000. At the time of writing, BTC price is $41,101. Crypto analysts expect a bounce from the current price level, if the asset fails to rally, further correction in BTC price is likely.
Whales on one of the largest derivatives exchange, Bitfinex, have likely positioned themselves for a shift in Bitcoin trend. This is evident from the sudden decline in Open Interest and an increase in stablecoin reserves on the exchange.
Also read: Grayscale’s Bitcoin sale unlikely to have driven BTC price lower, profit taking is likely driver
Daily Digest Market Movers: Bitcoin whales position for a shift in BTC price
- Crypto market participants track the moves of large wallet addresses on derivatives exchanges like Bitfinex, since this helps determine the direction of BTC price, in the short term.
- According to CryptoQuant data, whales on Bitfinex have closed their leverages positions and Open Interest in BTC has declined by nearly 21%.
Bitcoin Open Interest and price. Source: CryptoQuant
- The Open Interest in an asset is considered a key metric that represents the total value of open derivatives contracts, likely the investor confidence in BTC price decline is low.
- Bitcoin price dropped nearly 2% in the past week and nearly 7% on a monthly time frame.
- While Bitcoin ETFs continue to attract billions of dollars in volume, the effect is yet to be seen on BTC spot prices.
- To find out more about the reasons Bitcoin price is on a decline, check this post.
- There is a correlation between Bitfinex Open Interest and Bitcoin price, and this is one of the key reasons why whale movements on the derivatives exchange are of importance to BTC traders.
- If the Tether exchange reserves continue rising, in tandem with declining OI, it is likely a bearish indicator for Bitcoin price. A correction in Bitcoin could follow as derivatives traders close their leveraged positions.
Technical Analysis: Bitcoin price could bleed if it fails to bounce from $41,000
Mark Cullen, a crypto analyst on X (formerly Twitter) expects Bitcoin price to bounce from $41,000. If BTC fails to bounce from this level, Cullen predicts a correction in the asset. A bounce from the current level could send Bitcoin above $44,000 and a correction could push BTC to $39,080.
Bitcoin price chart
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.
