Institutional Investors Growing More Conservative in Avoiding Macro Risks Bitcoin OI Still at Historic High Levels

Institutional Investors Growing More Conservative in Avoiding Macro Risks Bitcoin OI Still at Historic High Levels

Institutional Investors Growing More Conservative in Avoiding Macro Risks Bitcoin OI Still at Historic High Levels

Institutional investors remain conservative, while offshore investors are active
The inflow of spot Bitcoin ETF reflects demand rather than hedging
Macro events are key in the short term
According to a report by The BlocK, analysts Vetle Lunde and DeFi analyst David Zimmerman of 33 Research stated in their report on Tuesday that leverage on Bitcoin perpetual contracts has reached a yearly high of 260,000 BTC. The analysts wrote in the report:
K33 analysts stated that after the net outflow of $64.9 million from the Bitcoin spot ETF on Monday, traders on the Chicago Mercantile Exchange (CME) began to reduce risk operations, causing the annualized futures premium for Bitcoin and Ethereum to drop from about 12% last week to 6% on Tuesday, the lowest level since May 23.
However, while short-term trading data from CME suggests that institutional traders are becoming more conservative, the open interest in perpetual contracts remains at historic highs, indicating that US offshore investors are still highly exposed.
Despite the uncertain trend of Bitcoin prices, the US spot Bitcoin ETF recorded the highest net inflow in three months last week, reaching 25,917 BTC (1.8 billion USD), raising doubts about whether the growth of the ETF is driven by CME basis trading activities (arbitrage between the spot and futures markets), suggesting that the inflow of the ETF may not be “net neutral.” In response, analysts from K33 Research stated:
“This observation is partially correct, but far from reflecting the entire situation, as since May 1, the BTC added to ETFs is 36,000 more than CME OI, indicating that the majority of ETF inflows come from participants aiming to establish a bullish direction.”
The correlation between Bitcoin and the US stock market has reached an unprecedented level in 18 months, with the 30-day correlation between Bitcoin and the Nasdaq rising to 0.64 last week for the first time since 2022. Given the influence of macro event risks on the US stock market, this week’s CPI inflation data and interest rate decisions are likely to be key determinants of the subsequent trend in the cryptocurrency market.
Analysts from K33 stated:
“The FOMC dot plot, as well as Chair Powell’s forward-looking guidance during the press conference, may be the most significant price driver, as Bitcoin begins to pay attention to market rate expectations.”
At the time of writing, Bitcoin briefly fell below $66,000. The exchange rate of Ether relative to Bitcoin also fell again, however, K33 analysts reiterated their bullish stance on Ethereum in the report, expecting its performance relative to Bitcoin to strengthen during the summer, based on the approval of an Ethereum spot ETF.