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Leading crypto exchange Bitfinex released its latest Bitfinex Alpha Report, a weekly publication that provides on-chain data and insights into the dynamic crypto market. This week’s document found that unconverted bitcoin volume has reached its all-time high.
The report further highlights an interesting development in liquidity trends. Bitcoin has seen a decrease in liquidity, while Tether USDT has seen a significant increase in liquidity.
Bitcoin’s constant supply affects ATH
bitfinex alpha The surge in unconverted bitcoin is attributed to the growing interest of institutional investors in the digital asset.
Citing data from Arc Invest, an investment firm headed by the renowned Cathy Wood, the paper states that nearly 70% of the circulating supply of BTC has remained unchanged for at least a year, the most ever recorded. Is.
The increasing participation of these large players indicates strong bullish sentiment and unwavering faith in the long-term prospects of bitcoin.
According to the report, BTC balances on over-the-counter (OTC) desks, which act as a reliable indicator of institutional activity, reached a one-year high in June. Balances increased by an impressive 60% by the end of the third quarter. This growth suggests that institutions and large investors are actively adopting cryptocurrencies as an attractive investment option.
The researchers also found that bitcoin holdings of crypto-related hedge funds, investment firms, and private funds have increased significantly as institutional investors accumulate BTC at current price levels.
Derivatives traders dominate the market
However, according to the report, there has been a significant increase in bitcoin open interest, up more than 38% since the initial spot bitcoin ETF filing by BlackRock, the world’s largest asset manager.
This increase signals a possible change in market dynamics, with derivatives traders potentially exerting more influence on the current momentum, ousting spot traders.
Bitfinex researchers warn that increased positions in futures contracts usually signal a short-term decline in the price of BTC. As such, traders must closely monitor the trend, as it can affect the market performance in the short term.
bitcoin liquidity crunch
The report also found that there has been a drop in the liquidity of bitcoin, while there has been a substantial increase in the liquidity of Tether USDT, the largest stablecoin in the market. As noted in the publication, the decreased BTC liquidity is in line with the trend of long-term bitcoin holdings.
Highlighting the development, the researchers said, “As more investors hold onto their bitcoin, less of it is available for trading, leading to a reduction in liquidity. This trend of ‘HODLing’ is often regarded as evidence of the faith placed in the long-term value of bitcoin, despite temporary market fluctuations.
However, it is worth noting that insufficient liquidity can lead to increased price volatility. When there is less BTC available to trade, price movements can be more drastic, which can pose a risk to traders.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off fees on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
[ad_1]
Leading crypto exchange Bitfinex released its latest Bitfinex Alpha Report, a weekly publication that provides on-chain data and insights into the dynamic crypto market. This week’s document found that unconverted bitcoin volume has reached its all-time high.
The report further highlights an interesting development in liquidity trends. Bitcoin has seen a decrease in liquidity, while Tether USDT has seen a significant increase in liquidity.
Bitcoin’s constant supply affects ATH
bitfinex alpha The surge in unconverted bitcoin is attributed to the growing interest of institutional investors in the digital asset.
Citing data from Arc Invest, an investment firm headed by the renowned Cathy Wood, the paper states that nearly 70% of the circulating supply of BTC has remained unchanged for at least a year, the most ever recorded. Is.
The increasing participation of these large players indicates strong bullish sentiment and unwavering faith in the long-term prospects of bitcoin.
According to the report, BTC balances on over-the-counter (OTC) desks, which act as a reliable indicator of institutional activity, reached a one-year high in June. Balances increased by an impressive 60% by the end of the third quarter. This growth suggests that institutions and large investors are actively adopting cryptocurrencies as an attractive investment option.
The researchers also found that bitcoin holdings of crypto-related hedge funds, investment firms, and private funds have increased significantly as institutional investors accumulate BTC at current price levels.
Derivatives traders dominate the market
However, according to the report, there has been a significant increase in bitcoin open interest, up more than 38% since the initial spot bitcoin ETF filing by BlackRock, the world’s largest asset manager.
This increase signals a possible change in market dynamics, with derivatives traders potentially exerting more influence on the current momentum, ousting spot traders.
Bitfinex researchers warn that increased positions in futures contracts usually signal a short-term decline in the price of BTC. As such, traders must closely monitor the trend, as it can affect the market performance in the short term.
bitcoin liquidity crunch
The report also found that there has been a drop in the liquidity of bitcoin, while there has been a substantial increase in the liquidity of Tether USDT, the largest stablecoin in the market. As noted in the publication, the decreased BTC liquidity is in line with the trend of long-term bitcoin holdings.
Highlighting the development, the researchers said, “As more investors hold onto their bitcoin, less of it is available for trading, leading to a reduction in liquidity. This trend of ‘HODLing’ is often regarded as evidence of the faith placed in the long-term value of bitcoin, despite temporary market fluctuations.
However, it is worth noting that insufficient liquidity can lead to increased price volatility. When there is less BTC available to trade, price movements can be more drastic, which can pose a risk to traders.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off fees on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
