As daily ETF withdrawals surpass $500 million, Bitcoin dumps its "bull market excess."
Data indicates that ETF investors are alarmed by BTC price behavior, but there are reasons to think that the cryptocurrency is undergoing a generally healthy correction.
Bitcoin (BTC) ticks lower, $56,671did not witness a “massive futures margin call” when the price of bitcoin fell to two-month lows, according to analysis.
The lead on-chain analyst of blockchain analytics company Glassnode, Checkmate, disclosed a significant shift in the Bitcoin bull market in a thread on X (previously Twitter) on May 2.
Analysis: In the sell-off of BTC prices, derivatives are not "dominant".
Although the May 1 surge of Bitcoin above $56,500 may have surprised some, this bull market retreat seems therapeutic for the health of the market overall.
Since Bitcoin’s most recent all-time highs in mid-March, there has been a progressive “de-leveraging” across all Bitcoin futures, as Checkmate demonstrates. This is ending the “bull market excess,” he claims.
An excerpt from one post said, “For those of you around in the 2021 Bitcoin bull market, you will remember the massive derivatives led deleveraging events which killed it.”
"Is there a derivatives led flush out happening today? Not in my opinion".
An auxiliary figure juxtaposed the decline following Bitcoin’s ascent to $58,000 in the first quarter of 2021.
Checkmate pointed out that one glaring difference between the market three years ago and now is the persistence of flat financing rates across derivatives.
It’s excellent to see that funding rates have decreased gradually rather than abruptly. It implies that yesterday’s significant futures margin call wasn’t witnessed,” the author said.
Subsequently, focus shifted to alternative explanations for the most recent decline in Bitcoin prices, which, as of this writing, had not rebounded significantly from the lowest points.
Along with a chart showing the 7-day change in Bitcoin futures open interest levels, the thread stated, “Futures markets also saw two statistically significant deleveraging events prior to this sell-off.”
"On the rally into the $73k ATH, we did experience two hot moments, but it quickly cooled off. Once more, it doesn't seem that derivatives played a major role in the recent decline in Bitcoin prices".
Bitcoin drops below the cost of ETFs
Speaking of selling, on May 1st there were net withdrawals of over half a billion dollars from US spot Bitcoin exchange-traded funds (ETFs).
Is the price of Bitcoin fluctuating around $57,000? This is why these levels are crucial.
It’s possible that investors’ knee-jerk response to the BTC price performance is the reason why BlackRock’s iShares Bitcoin Trust (IBIT) saw its worst-ever day of losses of about $40 million.
All of the ETF products showed a similar tale, with negative flows observed overall, according to data from sources, including the UK-based investing firm Farside.
With $191 million, the Fidelity Wise Origin Bitcoi It’s possible that investors’ knee-jerk response to the BTC price performance is the reason why BlackRock’s iShares Bitcoin Trust (IBIT) saw its worstever day of losses of about $40 million.
All of the ETF products showed a similar tale, with negative flows observed oveall, according to data from n Fund (FBTC) of Fidelity Investments saw the biggest withdrawal.
As part of an X answer, well-known trader Mikybull Crypto stated, “Bitcoin price path to create more fear across the market and then bottom for upward continuation.”
As part of an X answer, well-known trader Mikybull Crypto stated, “Bitcoin price path to create more fear across the market and then bottom for upward continuation.”
“IBIT’s first-ever outflows since the approval of the ETF were $36.9 million because the price is currently below the cost basis. Recall that positive news always denotes the peak of a Bitcoin bull cycle, while negative news denotes the bottom.”
The article exposed a dramatic shift in the atmosphere around the cryptocurrency market, with the Crypto Fear & Greed Index hitting 43/100, the lowest level since September of last year, and returning to “neutral” zone.
