Bitfinex Bitcoin longs hit 6-month high — Will BTC price follow?

Bullish Bitcoin (BTC) positions utilizing leverage connected the Bitfinex speech surged to their highest level successful astir six months, reaching 80,333 BTC connected March 20—equivalent to $6.92 billion. The 27.5% summation successful Bitcoin margin longs since Feb. 20 has fueled speculation that the 12.5% BTC terms summation from the $76,700 debased connected March 11 is driven by leverage and whitethorn not beryllium sustainable.

Bitfinex BTC borderline longs, BTC. Source: TradingView / Cointelegraph

However, Bitcoin’s terms does not ever determination successful tandem with bullish leveraged positions connected Bitfinex. For example, successful the 3 weeks ending July 12, 2024, ample investors added 13,620 BTC successful borderline longs, yet Bitcoin’s terms fell from $65,500 to $58,000. Similarly, a two-week-long summation of 8,990 BTC successful borderline longs took spot starring into Sept. 11, 2024, and this coincided with a terms diminution from $60,000.

Bitcoin borderline traders are highly profitable but besides risk-tolerant

In the agelong term, these savvy investors person timed the marketplace well, arsenic Bitcoin’s terms yet surpassed $88,000 successful November 2024, portion borderline agelong positions were reduced by 30% by year-end. Essentially, these traders are highly profitable but grounds a overmuch higher hazard tolerance and patience than the mean investor. Therefore, an summation successful leverage request does not needfully construe into upward unit connected Bitcoin’s price.

Additionally, the outgo of borrowing Bitcoin remains comparatively low, creating opportunities for market-neutral arbitrage arsenic traders capitalize connected inexpensive involvement rates. Currently, borrowing BTC for 60 days connected Bitfinex carries an annualized outgo of 3.14%, portion the funding rate for Bitcoin perpetual futures stands astatine 4.5%. In theory, traders tin exploit this dispersed done ‘cash and carry’ arbitrage, profiting without nonstop vulnerability to terms fluctuations.

Even if 1 assumes that astir of the $1.48 cardinal successful borderline longs are not arbitrage trades—meaning these ample investors are genuinely betting connected Bitcoin’s terms appreciation—other exchanges whitethorn person offset portion of this move. For instance, request for Bitcoin borderline longs has declined importantly connected OKX implicit the aforesaid 30-day period.

Bitcoin borderline long-to-short ratio astatine OKX. Source: OKX

The Bitcoin long-to-short borderline ratio connected OKX presently shows longs outweighing shorts by a origin of 15, the lowest level successful implicit 3 months. Historically, excessive assurance has driven this ratio supra 40, astir precocious successful precocious February erstwhile Bitcoin’s terms surged past $105,000. Conversely, a ratio beneath 5 typically signals a beardown bearish sentiment.

Bitcoin options terms balances risks of upside and downside fluctuations successful BTC price

To regularisation retired outer factors constricted to borderline markets, 1 should besides analyse Bitcoin options. If traders expect a correction, request for enactment (sell) options volition rise, pushing the 25% delta skew supra 6%. Conversely, during bullish periods, this metric typically falls beneath -6%.

Bitcoin 30-day options delta skew (put-call). Source: Laevitas.ch

Between March 10 and March 18, the Bitcoin options market showed signs of bearish sentiment but has since shifted to a neutral stance. This suggests that whales and marketplace makers are pricing akin risks for some upward and downward terms movements. Given the borderline marketplace trends connected OKX and the existent pricing of BTC options, a Bitcoin bull tally is acold from a statement expectation.

Bitcoin’s deficiency of bullish momentum tin partially beryllium attributed to the higher ostentation outlook and weaker economical maturation projections presented by the US Federal Reserve connected March 19. Concerns implicit a potential recession, exacerbated by a planetary tariff war, person made investors much risk-averse. As a result, adjacent though whales are expanding their vulnerability done Bitcoin borderline longs, wide marketplace sentiment remains subdued.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.