With risk assets in the financial sector currently appearing vulnerable, experts warn that economic factors could push bitcoin into a “slow bleed environment.” Last week, U.S. authorities released stronger-than-expected jobs data, causing a dent in assets like bitcoin. However, BTC remained resilient, with the help of continued inflows into the U.S. spot Bitcoin exchange-traded funds (ETF) market. Despite a recent 19-day inflow streak being broken on June 10, these inflows have played a crucial role in supporting bitcoin’s price.
Potential Disruptions Due to Economic Signals
Analysts caution that the positive trend supported by ETF inflows may be disrupted in the near future due to upcoming economic signals. The U.S. Consumer Price Index report and the Federal Open Market Committee meeting on interest rates could impact future ETF flows. These signals could potentially lead to a ranging or slow bleed environment for bitcoin, depending on the outcomes of these events.
Currently, funding rates are high in bitcoin perpetual futures markets, indicating that traders are paying a premium to open long positions. The rising open interest (OI) in bitcoin CME futures, along with ETF inflows, suggests that traders are leveraging the arbitrage opportunity between futures and spot markets. Despite a recent price correction, OI remains high at over $36 billion, indicating trader interest in the market.
Although positive ETF flows have offset some pressure on bitcoin, the cryptocurrency has failed to move past its range high. Before a recent plunge, BTC reached a range high above $71,500 for the first time since May when it hit a range low of less than $57,000. While a major decline is not expected immediately, the inability to surpass range highs remains a concern for bitcoin’s price stability in the future.
While ETF inflows and leveraging opportunities have supported bitcoin in the face of economic uncertainties, potential disruptions from upcoming economic events could impact the cryptocurrency’s price. Traders and investors should closely monitor the outcomes of the U.S. Consumer Price Index report and the Federal Open Market Committee meeting to gauge the future direction of bitcoin in the market.
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