Decline in open demand for Bitcoin on CME suggests more pain for BTC price: Bitfinex

Bitcoin (BTC) continued its downward trend, reaching new local lows below $59,000. In the middle hours of Monday's US trading session, BTC briefly fell below $60,000 to hit a new local low of $58,500.

This decline continues as the US spot Bitcoin Exchange Traded Fund (ETF) market continues into the new week.

According to the latest weekly report of crypto exchange Bitfinex, the US spot Bitcoin ETF lost more than $100 million on each trading day last week, bringing the total to $544.1 million. Analysts on the trading platform say the flow is weak-handed ETF investors reacting to short-term negative news and arbitrage due to negative funding rates.

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Bitcoin open interest decreased

According to Bitfinex, one of the signs of a fundamental/money arbitrage unraveling is a sharp drop in Bitcoin futures open interest on the Chicago Mercantile Exchange (CME) and other trading platforms.

Open interest on the CME fell by $220 million last week, while overall open interest on other platforms fell by more than $450 million over the same time frame. The fall pushed total open interest in Bitcoin futures down to $33.3 billion from a record high of $36.99 billion on June 7.

“This decrease in OI coincides with the negative volumes seen on various exchanges in the past week and is associated with net ETF inflows, suggesting a significant reversal of arbitrage trades linked to ETF flows. From this, it is important to acknowledge that not all ETF flows should be interpreted as direct spot sales, analysts said.

Bitcoin may be nearing the bottom.

Citing the latest Bitfinex Alpha report, analysts predicted that BTC could close to the bottom, as heavy ETF inflows, as seen, are often associated with the formation of local bottoms.

As BTC fell below $70,000 in early June, US spot Bitcoin ETFs recorded seven consecutive days of net inflows, highlighting the effect of sharp price movements on ETF investor sentiment.

Analysts said, “This pattern is important for investors to follow because it often hints at potential changes or stabilization points in the market.”

Meanwhile, Bitfinex analysts cautioned that market sentiment remains weak as there is weakness in crypto assets on lower timeframes (one-minute to 15-minute charts).