According to the Crypto Venture Capitalist, the price of bitcoin will continue to experience volatility, unless real buyers will start entering the market rather than traders seeking arbitration opportunities.
“This is a classic case of liquidity games. The ETFs were not only brought in long-term holders-they were running a short-term arbitration in the hedge funds, “said Kyle Chase, the founder of the Master Ventures in February 27X. Post,
Hedge funds were chasing “low -risk yields” on bitcoin
“For months, hedge funds were exploiting low -risk yield trade using BTC spot ETFS and CME futures,” Chase said.
He said that instability for bitcoin (BTC) will continue as leveraged positions become liquid and cash and carry trade will “keep uncontrolled.” “BTC needs to find real organic buyers (not only hedge fund extracting yields),” he said.
Chase explained that hedge funds were trading the difference between bitcoin futures price and the spot price of bitcoin, as the future price was high.
But as the market declines, the price difference “collapsed,” makes the business unprofitable. It is commonly known as cash and carry trade.
Chase said:
“Hedge funds don’t care about bitcoin.”
Echoing a uniform feeling, research marks the 10x research head of Thielen Explained In the February 27 report that crypto market sentiment declined, funding rates declined, possibly these trades were forced to rest.
However, Chase reported that hedge funds at the cost of bitcoin were never “betting”; Instead, they were chasing low -risk yields.
Source: Michael Siler
The price of bitcoin fell below $ 80,000 for the first time since November 10, broke from that level after Donald Trump’s reunion in the US presidential election.
Bitcoin falls below $ 80,000 for the first time since November
At the time of publication, Bitcoin is trading at $ 79,532, according to the tradingview data,
Bitcoin is trading at $ 79,532 at the time of publication. Source: Tradingview
SWYFTX chief analyst Pav Hundal told cointelegraph that while bitcoin could see more negative, most of the shakeouts have already played out.
“It is completely likely that we look at the bitcoin test at this point, but it is likely that most of the damage has been done.” He said that on February 28, the upcoming American inflation figures can improve the market situation if it comes less than expected.
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“Now that the business is dead, they are pulling liquidity – leaving the market in a free fall,” Chase said.
Since Bitcoin fell below $ 90,000 on 25 February, many analysts blamed Bitcoin and comprehensive crypto market for a decline in both Trump’s proposed tariffs for comprehensive economic uncertainty and concerns.
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There are no investment advice or recommendations in this article. Each investment and business move include risk, and readers should conduct their own research while taking decisions.
