As of June 13th, Bitcoin has been consolidating within a narrow range, hovering around $67,500.
This sideways movement has persisted for about three weeks, with the cryptocurrency oscillating between $72,000 (acting as resistance) and $66,350 (acting as support) since May 21. Let’s explore more about what is happening with Bitcoin’s Price.
Factors Contributing to Bitcoin’s Price Stagnation
Despite multiple attempts, Bitcoin has struggled to surpass its previous all-time high of $73,800. One of the primary reasons for Bitcoin’s stagnant price is the prevalence of cash-and-carry arbitrage strategies.
Source: Tradingview
Investors buy Bitcoin in the spot market and sell Bitcoin futures when prices are higher. It allows them to maintain a market-neutral stance.
This strategy has gained traction, especially with the rise of U.S.-based spot Bitcoin ETFs. These ETFs are designed to provide exposure to Bitcoin’s spot price. Inflows totaled $15.51 billion by June 13, up from $870 million at launch.
Source: Farside
In parallel, hedge funds have taken substantial short positions in both CME Bitcoin and Micro CME Bitcoin futures markets. With a total of $6.33 billion and $97 million, respectively. This activity coincides with a notable increase in open interest and market dominance.
These dynamics reflect a cautious approach from institutional investors. They stabilize prices by balancing ETF buying and futures selling pressures.
Source: Glassnode
Impact of ETF Inflows on Bitcoin’s Market Dynamics
Furthermore, Bitcoin’s price stability is reinforced by the consistent holdings of large Bitcoin whales. These entities, holding substantial Bitcoin amounts, reduce volatility by maintaining positions without active trading. This stable accumulation by whales acts as a cushion against sudden price fluctuations.
Source: Glassnode
Lastly, technical patterns in Bitcoin’s price chart also play a role in reinforcing the current sideways trend. The repeated attempts to break above $72,000 have been met with resistance. This forms a technical barrier that traders and algorithms respond to, solidifying the consolidation phase further.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
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