On the day when sharp sales in Bitcoin came to the fore, it was reported that a large investor on the Bitfinex exchange aggressively accumulated a leveraged long position. CoinCorner CEO Danny Scott stated that a Bitfinex investor, who has stood out for reading the market correctly in the past, created a remarkable jump in transaction data.
Remarkable movement in Bitfinex data
The data Scott pointed out was the BTCUSDLONGS indicator, which reflects margin transactions on the stock market. The indicator in question rose above the 87,000 level. This chart indicated that a high-capitalization market participant was rapidly increasing their bullish positions using leverage in Bitcoin.
Mini dictionary: Margin trading means that the investor opens a position with borrowed funds. Long position refers to the direction taken with the expectation that the price will rise; The use of leverage can increase losses as well as profits.
CoinCorner CEO Danny Scott stated that a large investor on Bitfinex, who attracted attention with accurate transactions in the past, moved the market indicators vertically up.
This movement was seen in the same period as the sharp pullback in the spot market. Bitcoin dropped by 5.89 percent during the day to $67,166.39. Thus, the market fell below the psychological support of $70,000, which has been closely watched for a long time.
Liquidations in the derivatives market accelerated sales
It was stated that the decrease in prices was not limited to spot sales only, and the dissolution in derivative markets also increased the pressure. According to the data, over $431 million was liquidated in long positions. During this period, it was observed that sales accelerated and negative expectations gained strength on the trading desks.
In the same period, the news flow that Michael Saylor’s company Strategy sold some of its Bitcoin assets was also mentioned with the pressure in the market. It was stated in the news that this development came after the general sales wave.
It was observed that the decline in the spot market accelerated with the harsh liquidations on the derivative side, and the closure of long positions exceeding $431 million deepened the decline.
Crypto market has diverged from stocks
The recent decline revealed that the divergence between digital assets and traditional markets has become more pronounced. While S&P 500 completed its ninth consecutive week with an increase, Nasdaq Composite gained 8 percent in value in the last month. However, the crypto market did not accompany this period of increased risk appetite.
Algorithmic digital asset trading company Wintermute reports that traditional equity markets are riding on strong corporate revenues supported by AI spending. It was evaluated that technology companies have started to generate tangible income from artificial intelligence infrastructure, while crypto assets remain more open to macroeconomic pressures because they do not have a similar company earnings narrative. Wintermute stands out as a company known for its algorithmic trading activities in the digital asset market.
Macro pressure and ETF outflows came to the fore
US inflation data was cited as one of the main reasons for the macro pressure on the market. The latest personal consumption expenditures, or PCE, data revealed that headline inflation remained at 3.8 percent. This outlook preserved uncertainty over interest rate expectations.
Institutional investor flows also weakened in parallel with this situation. Spot Bitcoin ETFs recorded an outflow of $483.8 million in a single day. Thus, no net inflow was seen in the two-week period. A total of $2 billion has left Bitcoin and Ethereum ETFs in the last 10 days.
