- During the extended long weekend in the US, markets are showing weakness as the Asian trading session begins.
- In the past 4 hours, only $655,000 worth of positions were liquidated in Bitcoin, and $910,000 worth of liquidations occurred in the past 12 hours.
- According to Block Scholes, the correlation between Bitcoin price changes and US stock markets, especially the Nasdaq and S&P 500 indices, has significantly decreased in the past 90 days.
Despite the calmness in the US, Bitcoin appears determined to stay above $30,500; open interest has increased by approximately 30% since June 15.
Bitcoin Holds Above $30,000
During the extended long weekend in the US, as the Asian trading session begins, markets are showing weakness. Bitcoin dropped by 2% to $30,360, while Ethereum declined by 2.6% to $1,905. However, trading volume on major exchanges experienced a decrease of 15% to 20%.
The decrease in activity is reflected in liquidation volumes. In the past 4 hours, only $655,000 worth of positions were liquidated in Bitcoin, and $910,000 worth of liquidations occurred in the past 12 hours. These figures indicate relatively low levels of trading and liquidation activity in the market.
When BlackRock filed for an ETF on June 15, open interest in Bitcoin was just above $11 billion. Today, the open interest has surpassed $14.3 billion, representing an increase of approximately 30% since June 15.
Decreasing Correlation Between Bitcoin and US Stocks
According to crypto analytics firm Block Scholes, the correlation between Bitcoin price changes and US stock markets, especially the Nasdaq and S&P 500 indices, has significantly decreased and approached zero in the past 90 days. This represents the lowest correlation level observed in the past two years.
A research analyst at Block Scholes stated that the decreasing correlation occurred during a period when both Bitcoin and traditional assets recovered from the losses they experienced during the tightening period last year. Crypto traders who rely heavily on traditional market sentiment and macroeconomic developments may face difficulties in predicting Bitcoin’s price movements.
The applications for spot Bitcoin exchange-traded funds (ETFs) by major financial institutions such as BlackRock, Fidelity, WisdomTree, VanEck, and Invesco have created optimism in the crypto market. Since BlackRock’s application on June 15, Bitcoin has shown a significant 25% return despite the range-bound activity seen in US stock indices.
According to Ilan Solot, the head of digital assets at Marex Solutions, the ETF story can be understood in three key aspects. Firstly, expectations and speculation surrounding the launch of these ETFs can lead to potential front-running among investors. Secondly, when spot ETFs go live, significant capital inflows can occur in the market. Lastly, the approval and introduction of these ETFs will contribute to the recognition of cryptocurrencies as a recognized asset class.”
