Bitcoin pro traders were unmoved by BTC sales, the data indicated a new price increase
The newly launched space bitcoin (BTC) exchange-traded funds (ETFs) experienced a first week of net inflows between March 18 and March 22. A total of $888 million was withdrawn from the spot ETFs, a significant change of $2.57 from the previous week. billion revenue. This led to speculation that Bitcoin's rally to $70,000 would be sustained on March 25.
A BTC ETF can collect Bitcoin in the absence of earnings.
Some market participants argued that it was the key driver of institutional gains from Bitcoin's high of $73,755 on March 14, casting doubt on the 9% gain seen between March 23 and March 25. Of further concern is the fact that this rally took place at a time when The S&P 500 index failed to hold the all-time high of 5,260 set on March 21.
Analyst venturefoundΞr, on March 20, pointed out that FOMO is facing a reality check after the effective “fishing” of ETF investors who bought after FOMO to a new high before reducing. While the 15% gain from March 20 to March 25 should not completely eliminate bearish concerns, Bitcoin's market behavior shows that its momentum is not solely dependent on ETF earnings.
Some traders believe the recent approval of a $1.2 trillion spending package by the United States on March 23 will serve as a key positive boost for Bitcoin. This is especially true in light of the US Federal Reserve's forecast model, which predicts three interest rate cuts by 2024. With the US deficit expected to reach $1.6 trillion by 2024, pressure on government debt payments will intensify as interest rates hover above 5.25%.
Rare assets such as gold, bitcoin, real estate and the stock market have risen to all-time highs, signaling a weakening US dollar. Ultimately, the performance of North American currencies against the euro and the British pound is of little importance as investors seek refuge from the fiat currency crash.
It may seem premature to conclude that Bitcoin's price will continue to rise due to monetary expansion. However, they argue that the US fiscal hike will lead to a recession—which could have a negative impact on risk assets—missing a crucial point: BTN prices are up 64% year-on-year by 2024, leaving those who are looking deeper behind.
Bitcoin derivatives remain firm below $62,000.
To gauge whether the pessimistic position of professional traders has become more pessimistic on Bitcoin following ETF earnings data, one should examine BTC monthly futures contracts. In the independent market, these contracts usually command a premium of 5% to 10%, covering their longer settlement periods.
The data indicated that the annual BTC futures premium was unaffected by net spot ETF flows. Currently, the 18% level is seen as optimistic, suggesting that buyers are willing to pay a premium to open leveraged long positions.
Related: Bitcoin ETFs May Soften BTC's Price Decline Before Halving
Examining the Bitcoin options market is crucial to determine whether the March rally has fueled interest in strategies to counter price corrections that could increase to $70,000. Typically, if traders are anticipating a Bitcoin price decline, volatility metrics will be above 7%, while demand periods will often show a slip below 7%.
As of March 13, the 25% delta skew of BTC options remained in neutral territory, indicating a balanced demand for bullish and bearish options strategies. Notably, there were no signs of panic when Bitcoin tested the $62,000 support on March 20.
Bitcoin derivatives markets are pointing to a strong price recovery despite recent position ETF exits that support the strength of the $70,000 support level.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
