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Bitcoin Demand Shock Explained: Buying Pressure... Open Interest... Funding Rate

The current Bitcoin (BTC) situation reveals a clear demand shock, with prices stabilizing around $71,000. Demand from institutional investors, particularly through exchange-traded funds (ETFs), is fueling this increase.

Bitcoin spot ETFs saw unprecedented net inflows. Over the past 18 days, they have recorded continuous positive flows, the longest streak since their inception.

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Among Bitcoin ETFs, BlackRock's iShares Bitcoin Trust (IBIT) is particularly notable. It accumulated $350 million on Thursday, the highest level in the last two months of trading. In total, IBIT acquired approximately $780 million worth of BTC over the past three trading days.

This week alone, Bitcoin ETFs have collectively seen inflows exceeding $1.7 billion. Importantly, June 4 saw the highest daily inflow of the week, with BTC ETFs attracting a total of $886 million.

“This is the highest weekly flow since launch (+$1.7 billion) – and we still have one day to go” He said Miles Deutscher, cryptocurrency analyst.

Due to these instant inflows of Bitcoin ETFs, Mati Greenspan, founder of research and advisory fund Quantum Economics, said in an interview with BeInCrypto that demand from Wall Street is unprecedented.

“Not only did they become very strong online at the start of the year, but they also managed to maintain their appetite in the face of rapidly changing macroeconomic conditions,” Greenspan told BeInCrypto.

Additionally, the gap between Bitcoin miner production and ETF purchases highlights the demand shock. Emphasize Cryptocurrency investor Adam Back noted that while miners only produced 450 BTC on June 4, ETFs purchased a staggering 12,508 BTC.

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Despite these bullish activities, the Bitcoin funding rate remains neutral. This rate is necessary to maintain market balance and is an interchangeable fee between perpetual futures traders. It aligns the contract price with the spot price of BTC.

Although high Bitcoin PricesA neutral funding rate indicates balanced market sentiment with low risk of a sudden downturn.

He added Deutscher “Last time we were here (March/April) – it was a sea of ​​orange/red (high funding rate).”

Interest in BTC funds ETFs Is increasing

Additionally, open interest in Chicago Mercantile Exchange (CME) Group is on the rise, once again approaching all-time highs. declared Analyst Vetle Lunde of K33 Research says the increase is due to more direct participant exposure and strong inflows into leveraged ETFs.

Open interest, which represents the total of outstanding derivative contracts that have not yet settled, reached an 11-week high, exceeding 75,000 BTC. This measure indicates growth in market liquidity and reflects an increase in market sentiment and participation.

Additionally, according to data from CryptoQuant, the supply of Bitcoin on cryptocurrency exchanges is at its lowest level in a year.

“Just in time for a second wave of ETF inflows.” Demand shock + inelastic supply. » He said Bitcoin investor, Thomas Fahrer.

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Bitcoin Exchange Reserve
Bitcoin exchange reserve. Source: Cryptoquant

This traditional economic scenario of high demand coupled with low supply indicates potential BTC price growth. The convergence of growing institutional demand, balanced market mechanisms through neutral funding rates, and tightening Bitcoin supply opens up promising prospects for the near-term valuation trajectory.

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