原文标题：Bitcoin ETFs and OGs Offload $1B Each - Should You Sell Too?
原文作者:Markus Thielen
原文来源：10xresearch
编译:Wenser Odaily星球日报
The four-year cycle and supply-flow models are key tools for price forecasting
The quadrennial predictive parabolic cycle pattern is crucial as the basis for estimating the price of Bitcoin, which is the basis for 95% of cryptocurrencies. Although, this pattern is often over-exaggerated, suggesting that the value of Bitcoin will rise indefinitely. Another key tool is the "supply-circulation model", which predicts the infinite value of Bitcoin by emphasizing the reduction of supply.
As always, most experts this year still predict new highs for the Bitcoin price, with forecasts ranging from $100, 000 to $150, 000 and even higher.
Technological innovation and human psychology (especially the interplay of greed and fear) are two factors that are key catalysts for the cyclical market of cryptocurrencies. Still, the market is essentially a momentum game – most participants actively push prices up and maintain a consistent bullish stance. This self-fulfilling prophecy underscores the need to seize upward momentum decisively when opportunities arise. At the same time, this phenomenon also indicates that there may be more cycles in the future.
Bitcoin's utility value and valuation based on cash flow should be addressed in the discussion. Unlike other assets, Bitcoin is similar to gold if valued according to the production cost curve. And over time, the psychology of buying bitcoin becomes more complicated, because a bitcoin that can be bought at a high price (such as $70, 000) may not seem as attractive as a billion cryptocurrencies that can be bought for $100. Meme coins take advantage of this psychology, and public companies achieve the same through stock splits.
Bitcoin (purple) vs. Money Flow indicator (white).
The three major groups are selling Bitcoin, and hedge fund arbitrage opportunities may have disappeared
Although the current market structure is not completely bullish, we speculated three weeks ago that Bitcoin will try to break through when it approaches the price of $70, 000 based on the view that "a parabolic rally is usually achieved after reaching new all-time highs"; And when a breakthrough fails, risk management becomes crucial. At the time, we expected that lower inflation data would be a catalyst for the price of bitcoin, and it did, but bitcoin suffered a massive sell-off.
First, Bitcoin ETFs have sold $1 billion in assets over the past eight trading days, contrary to the aggressive buying of Bitcoin ETFs brought on by previous inflation changes.
Second, Bitcoin miners' over-the-counter sales grew to their biggest single-day trading volume since March, with sales exceeding 3, 200 BTC in a single day. Listed miners have a 3% market share, but sold a net 8, 000 BTC in May (June data is not yet available, but miners have seen a significant increase in sales). Miners' Bitcoin reserves have fallen from $129 billion on June 5 to $118 billion now.
Finally, another group of sellers were early Bitcoin holders, who sold for $1.2 billion.
All three seem to be satisfied with selling Bitcoin for more than $70, 000.
We estimate the average entry price of a Bitcoin ETF at $60, 000 to $61, 000, and a price return to this level could lead to a wave of liquidations. And when Bitcoin fell to $56, 500 on May 2, BlackRock issued a statement saying that "sovereign wealth funds and pension funds are coming in." This has somewhat prevented Bitcoin's further decline, but now, BlackRock says 80% of purchases of their Bitcoin ETF IBIT are coming from retail investors rather than institutions (see this report for sources).
Currently, the price level of $61, 000 is in line with the 21-week dynamic average, and in previous cycles, this indicator was a good risk management indicator when buying (the price of Bitcoin is above the 21-week dynamic average) or selling. We estimate that 30% of the $14.5 billion in Bitcoin ETFs came from arbitrage-seeking hedge funds, and the eight-trading day ETF liquidation suggests that these funds may not have continued the carry trade (long ETF vs. short CME futures) as the futures expiration date (June 28) approached, as the arbitrage opportunity had vanished.
Bitcoin (white) vs. its 21-week dynamic average (purple).
The arbitrage opportunity exists because high interest rates allow exchanges to sell futures at a premium, and most crypto traders tend to be bullish (on the buyer's side), which fuels the rise in the cost of capital. The average APR for Bitcoin in 2024 is 16%, compared to 8-9% in the past few days. As a result, this one-digit funding rate may not be able to sustain the arbitrage game, resulting in a continuous outflow of Bitcoin ETFs. This is the flip side of the arbitrage signaling effect that we explained in articles such as March 8 (the first cautious statement since the Bitcoin price reached $40, 000) and April 5.
Our market structure analysis breaks down the liquidity component and therefore sometimes provides a cautious view that is contrary to the potentially bullish (parabolic) narrative. In fact, despite a noticeable slowdown in Bitcoin ETF inflows since March 12 (when CPI data was rising rapidly), a significant drop in altcoin trading volumes, and a consequent drop in funding rates, the Bitcoin price has remained in a wide range of 15% over the past three months.
Since April 21 (when the Bitcoin halving was completed), stablecoin minting has slowed significantly. These factors (Bitcoin ETF inflows and the suspension of stablecoin minting, the fall in altcoins and funding rates) have led us to fear a drop in the price of Bitcoin to $52, 000-55, 000, which is only about 3% different from the actual performance of the market (the price of Bitcoin fell to as low as $56, 500).
On May 15, Bitcoin ETF inflows reached $3.8 billion in the next 20 days following the release of lower CPI data. If growth is sustained, we expect lower CPI readings to drive a market rally and expect CPI readings to fall below 3.0% later this year. Bitcoin fell as much as 30% in July 2019 when the Federal Reserve cut interest rates due to falling inflation and weak economic growth, so the reason for the rate cut is important.
However, due to the weakening attractiveness of arbitrage (funding rate), the purchase volume of Bitcoin ETFs failed to achieve growth this time. When the U.S. Securities and Exchange Commission (SEC) hinted on May 20 that the Ethereum ETF could be approved, the market structure improved significantly as futures positions increased. In the space of three weeks or so, the market bought $4.4 billion in Ethereum futures positions (up to 50%) and $3 billion in Bitcoin futures. Combined with the May 15 CPI data, this effectively improved the market structure and helped the price of Bitcoin recover to $70, 000, with early holders, miners, and ETFs actively choosing to sell their Bitcoin positions.
Key Points: Can you hold 61000 and 65000?
Trading has always been a "risk-reward game", and as we noted on June 3, if the price of Bitcoin fails to reach an all-time high in June, there is a cascading risk of having too much ETH futures position. Leveraged futures traders have been the primary or even the only buyers since the U.S. Securities and Exchange Commission (SEC) approved Filing 19b-4 on May 23 (S-1 is still pending). Their money flows pushed Bitcoin back to the top of the range, and coupled with the lower CPI data, the risk/reward ratio skewed towards a breakout for Bitcoin.
Lower inflation data, the U.S. election, and a rally in U.S. equities are the non-crypto market catalysts that have supported Bitcoin's rally later this year. But without more stablecoin minting, Bitcoin ETF inflows, and increased leverage on futures or other liquidity (market structure) indicators, Bitcoin bulls could miss out on upside opportunities.
Every time a price attempt fails to break out or Bitcoin trades back below the all-time high of the previous cycle ($68, 300 as the dividing line), we need to redefine a horizontal line for risk management of open positions.
In previous cycles, the 21-week dynamic average of $61, 000 avoided a larger pullback to some extent.
Another key point is $65, 000, which is the median price of the last three-month consolidation period and may signal the formation of a larger cycle top.
We don't blindly believe unfounded claims, and we rely more on the information reflected in the data. The current state of the market is worrying given that the number of market participants, including early holders, Bitcoin ETF buyers, miners, stablecoin issuers, etc., has not increased significantly.
As a result, everyone needs to decide for themselves their own risk-taking capacity. By combining risk management and data analysis, traders can "stay off the table". As an old trader said to us 15 years ago – "the market opens every day", which means that there will always be the next opportunity, the next cycle.
Bitcoin (white) vs. its monthly stochastic indicator (purple).