Bitcoin ETF outflows suggest potential market bottom, according to Bitfinex data
Bitcoin ETFs in the US saw significant outflows last week, marking a potential market bottom for cryptocurrencies, according to Bitfinex analysts. A total of $544.1 million exited the funds, attributed to “basis/funding arbitrage unwinding and investor reactions to short-term negative news” in the “Bitfinex Alpha” report.
Moreover, Bitcoin open interest dropped by more than $450 million, with total BTC futures open interest standing at $33.3 billion, a decline from the peak of nearly $37 billion on June 7th.
The negative funding rates on exchanges have led to unwinding of funding arbitrage trades associated with ETF flows. However, not all ETF outflows directly result in spot selling. Historically, ETF outflows have often preceded local bottoms in BTC prices, a trend that seems to be recurring.
Despite a significant sale of BTC by the German government and a broader market decline, MicroStrategy’s acquisition of 11,931 BTC for $786 million provided some support.
Market volatility patterns, particularly on Thursdays and Fridays, have shown substantial price movements. The recent US stock market “triple witching” event contributed to volatility, impacting crypto assets due to their correlation with the S&P 500.
The report also notes a decline in the total market cap of cryptocurrencies last week, reaching a low of $2.17 trillion.
The US Dollar Index reached a 50-day high of 105.8, indicating a shift away from currencies like the euro, British pound, and Swiss franc. This movement, which has a reverse correlation with BTC, is deemed negative for the crypto market in general.
