Bitcoin has recovered from the selloff to $61,300 that followed Strategy’s Bitcoin sale announcement. The quick rebound suggests bulls remain positioned, despite the initial negative impact on traders’ sentiment. The additional $216 million cash position eased concerns about the company’s ability to pay dividends and cover its debt.
Funding Rates
The Bitcoin perpetual futures annualized funding rate jumped to 9% on Monday, indicating balanced demand between bullish and bearish leverage. This is a significant shift from the bearish momentum on Saturday, marked by negative funding rates.
Market Indicators
Bitcoin options signaled minor stress on Monday, with the put options premium at Deribit outpacing the equivalent call instruments. The put-to-call ratio remains under the neutral range, at 1.15. Bitcoin futures and options displayed resilience, although the bounce to $63,500 was unable to instill bullishness.
ETF Flows
The $223 million net inflows into US-listed spot Bitcoin exchange-traded funds (ETFs) on Friday may have been underestimated by bears. This marks the first inflow after 10 consecutive outflows, which had negatively impacted trader sentiment. A potential reversal in ETF flows could be enough to instill bullishness in Bitcoin derivatives markets.
Market Outlook
Despite Strategy’s sufficient cash reserves to cover 17 months of dividends, the company’s $8 billion in unrealized losses from its Bitcoin purchases gives bears the upper hand. Bitcoin bulls’ hopes rely on long-term holders’ conviction and onchain data pointing to selling exhaustion, strengthening the $60,000 support level. Transfers from long-term holders to exchanges are down, but derivatives traders remain skeptical of sustained bullish momentum.
Based on reporting from crypto.news.
