Bullish bitcoin (Btc) Positions that use leverage in the Bitfinex Exchange advance to their highest levels in almost six months, reaching 80,333 BTCs on March 20 – equivalent to $ 6.92 billion. The increase of 27.5% in Bitcoin Longs of margin Since Feb.
Bitfinex BTC Margin Longs, BTC. Source: TradingView / Cointelegraph
However, the price of Bitcoin does not always move in conjunction with bullish leveraged positions in Bitfinex. For example, at three weeks ending July 12, 2024, big investors added 13,620 BTCs to Margin Longs, but Bitcoin price fell from $ 65,500 to $ 58,000. Similarly, a two -week increase of 8,990 BTC in margin longs took place leading to Sept. 11, 2024, and it coincides with a price drop from $ 60,000.
Bitcoin’s margin traders are highly profitable but also at risk
In the long run, these evil investors have timed the market properly, as the price of Bitcoin eventually exceeds $ 88,000 in November 2024, while long positions decreased by 30% by the end of the year. Essentially, these merchants are very profitable but show a higher risk of tolerance and patience than the average investor. Therefore, an increase in leverage demand does not necessarily translate to the upward pressure on the price of bitcoin.
In addition, the cost of borrowing bitcoin remains relatively low, creating opportunities for market arbitration neutral as entrepreneurs integrate cheap interest rates. Currently, BTC borrowing for 60 days in Bitfinex carries an annual cost of 3.14%, while the funding rate For Bitcoin Perpetual Futures is at 4.5%. In theory, merchants can take advantage of this spread through ‘cash and carry’ arbitration, profiting without direct exposure to price change.
Although one assumes that most $ 1.48 billion in margin is not trade trade – which means that big investors are truly assessed by appreciation of bitcoin prices – other exchanges may have an offset part of this move. For example, the demand for Bitcoin Margin Longs has refused greatly in OKX in the same 30-day period.
Bitcoin margin long-to-short ratio to OKX. Source: Okx
The Bitcoin long-to-short margin ratio in OKX is currently showing longs outweighing shorts by a factor of 15, the lowest level for more than three months. Historically, the overwhelming confidence has led to this ratio above 40, latest in late February when the price of Bitcoin has passed $ 105,000. Conversely, a ratio below 5 usually expresses a strong emotion.
Bitcoin price options balanc the risks of upside down and downside BTC price change
To rule out external factors limited to margin markets, one must also evaluate Bitcoin options. If entrepreneurs expect a correction, the placing (sell) options will increase, pushing the 25% delta skew above 6%. Conversely, in bullish periods, this measure usually decreases below -6%.
Bitcoin 30-day Delta Skew (Put-Call) options. Source: Laevitas.CH
Between March 10 and March 18, the Bitcoin Market options showed signs of bearish sentiment but since switching to a neutral bearing. This indicates that whales and market makers send similar risks for both ascending and lower price movements. Given the trends in the Margin market at OKX and the current pricing of BTC options, a Bitcoin Bull run is far from a consensus.
Lack of Bitcoin’s bullish momentum may be slightly attributed to higher insights on inflation and weaker economic growths presented by the US Federal Reserve on March 19. retreatOverwhelmed by a global tariff war, investors have become more dangerous. As a result, even though whales increase their exposure through the Longs of Bitcoin, the general sentiment in the market remains covered.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
