The Breakdown Why So Gloomy? Mt. Gox Unlocks Latest Bummer in Downward Sentiment Spiral
Jun 25, 2024
Exploration of recent Bitcoin market decline, including sentiment factors and trading strategies. Discussion on ex-Bitcoin being minted, ETF inflows, and basis trade. German government's Bitcoin movements spark market speculation. Challenges for Bitcoin miners, Mt. Gox distribution impact on markets.
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Persistent Correction
- Bitcoin's current correction is less severe than April's, but more persistent.
- Poor liquidity is causing a slow bleed in price, despite some positive on-chain indicators.
ETF Outflows
- Bitcoin ETFs saw their first consecutive weeks of outflows exceeding $500 million.
- Fidelity saw significant redemptions, suggesting a large trade being unwound.
Basis Trade Unwind
- Hedge funds likely unwinding the basis trade, involving spot Bitcoin ETFs and futures.
- The collapsing spread between futures and spot makes the trade less appealing.