- Bitcoin price is trading sideways above $41,000 on Monday, after a week-long decline.
- Whales on a leading cryptocurrency exchange closed their leveraged positions, leading to a significant increase in USDT reserves.
- Whale’s strategic moves indicate a 21% decline in open interest on Bitfinex indicating a potential shift in BTC price direction.
The price of Bitcoin has fallen throughout the past week. The largest asset by market cap is struggling to keep its head above choppy waters at $41,000. At the time of writing, Bitcoin’s price is $41,101. Cryptocurrency analysts expect a bounce from the current price level, and if the asset fails to rise, a further correction in the BTC price is likely.
The whales at one of the largest derivatives exchanges, Bitfinex, may have prepared for Bitcoin to turn around. This is evidenced by a sudden decline in open interest and an increase in stablecoin reserves on the exchange.
Read also: Selling Bitcoin on Grayscale is unlikely to cause the price of BTC to fall, and profit-taking will likely be the driver
Daily Market Movers Summary: Bitcoin Whales’ Position on a BTC Price Shift
- Cryptocurrency market participants track the movements of large wallet addresses on derivatives exchanges such as Bitfinex, as this helps determine the direction of BTC’s price, in the short term.
- According to CryptoQuant data, Bitfinex whales closed their leveraged positions and open interest in BTC fell by approximately 21%.
Bitcoin open interest and price. Source: Cryptoquant
- Open interest is originally a key metric that represents the total value of open derivatives contracts, and investor confidence in a decline in Bitcoin prices is likely low.
- Bitcoin price is down about 2% in the past week and about 7% on a monthly time frame.
- While Bitcoin ETFs continue to attract billions of dollars in volume, the impact on Bitcoin spot prices has yet to be seen.
- To learn more about the reasons for the decline in the price of Bitcoin, check out this post.
- There is a relationship between Bitfinex’s open interest and the price of Bitcoin, and this is one of the main reasons why the movements of whales on the derivatives exchange are of interest to BTC traders.
- If Tether exchange reserves continue to rise, combined with declining OI, it will likely be a bearish indicator for Bitcoin price. A correction in Bitcoin could follow as derivatives traders close out their leveraged positions.
Technical Analysis: Bitcoin price may bleed if it fails to rebound from the $41,000 level
Mark Cullen, a cryptocurrency analyst at If Bitcoin fails to rebound from this level, Colin expects a correction in the asset. A bounce from the current level could send Bitcoin above $44,000 and a correction could push BTC to $39,080.
Bitcoin price chart
Frequently Asked Questions About Cryptocurrency ETFs
An exchange-traded fund (ETF) is an investment instrument or index that tracks the price of an underlying asset. ETFs can track not just a single asset, but a range of assets and sectors. For example, a Bitcoin ETF tracks the price of Bitcoin. An ETF is a tool that investors use to gain exposure to a specific asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities and Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, and more than 20 are still awaiting the regulatory body’s permission. The SEC says the cryptocurrency industry is new and subject to manipulation, which is why it has delayed crypto-related futures ETFs over the past few years.
A Bitcoin exchange-traded fund has been approved outside the United States, but the SEC has not yet approved one in the country. After BlackRock filed for a bitcoin ETF on June 15, there was renewed interest in cryptocurrency ETFs. Grayscale — whose application for a Bitcoin ETF was initially rejected by the Securities and Exchange Commission — scored a victory in court, forcing the US regulator to review its proposal once again. The SEC’s loss in this lawsuit has raised hopes that a Bitcoin exchange-traded fund may be approved by the end of the year.