The location of the LELLICO BITCOIN (BTC) using Bitfinex Exchange’s leverage has surged to the highest level in almost six months, reaching 80,333 BTC on March 20, reaching $ 69.2 billion. Since February 20, the increase of 27.5% of Bitcoin Margin has been speculated that on March 11, the $ 76,700 BTC price increase in BTC prices may be led by leverage and not sustainable.
Bitfinex BTC Margin Longs, BTC. Source: TradingView / COINTELEGRAPH
But the price of Bitcoin is not always moving with optimistic location in Bitfinex. For example, during the three weeks ending on July 12, 2024, large -scale investors added 13,620 BTCs to Margin Long, but the price of Bitcoin fell from $ 65,500 to $ 58,000. Similarly, 8,990 BTC increased for two weeks in the margin long following September 11, 2024, which was consistent with the price drop at $ 60,000.
Bitcoin margin traders are profitable but dangerous despite risks
The price of Bitcoin was over $ 88,000 in November 2024, and the margin long -range position decreased by 30% on the annual end. In essence, these traders are profitable but have a much higher risk resistance and patience than the average investor. Therefore, the increase in leverage demand is not necessarily converted to an upward pressure on the price of bitcoin.
In addition, the cost of borrowing Bitcoin is relatively low, creating an opportunity for market neutral arbitrage transactions as the trader uses low interest rates. Currently, Bitfinex borrows BTC for 60 days is 3.14%annually, and Bitcoin Perpetual Futures is 4.5%. Theoretically, traders can not be directly exposed to price fluctuations, but can exploit this spread through ‘cash and transport’ arbitrage.
Even if the margin length is not an arbitrage trading, these large investors are truly betting on the price audit of Bitcoin. Other exchange can offset some of these movements. For example, the demand for Bitcoin margin long has been greatly reduced in OKX for the same 30 days.
Bitcoin margin long -term ratio in OKX. Source: OKX
OKX’s Bitcoin long -range margin ratio shows a long time, surpassing 15 times the lowest level for three months. Historically, excessive confidence ranked 40th, and most recently, this ratio was made at the end of February when Bitcoin’s price exceeded $ 105,000. On the contrary, the ratio of less than 5 usually signals a strong weak feeling.
Bitcoin option price balanced BTC price rise and risk of lower fluctuations
To exclude external factors limited to the margin market, Bitcoin options should also be analyzed. If the trader predicts the modification, the demand for the PUT (SELL) option increases, and the 25% Delta Scride is pushed to more than 6%. On the contrary, during the strong period, this metrics are usually less than -6%.
Bitcoin 30 Days option DELTA SKEW (PUT-CALL). Source: LAevitas.ch
The Bitcoin option market has shown signs of weak feelings between March 10 and March 18, but has since been neutral. This suggests that whales and market manufacturers have similar risks for rising and falling prices. Given the current price of margin market trends and BTC options for OKX, Bitcoin Bull Run is far from consensus expectations.
BITCOIN’s lack of momentum can be partially caused by inflation forecast and weak economic growth proposed by the US Federal Reserve Bank on March 19. Concerns about the potential recession worsened by the global tariff war have made investors more dangerous. As a result, the whale is increasing the exposure through the length of the bitcoin margin, but the overall market sentiment is still conquered.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.