Bitfinex analysts said the forced-selling "fuel" behind Bitcoin’s late-June drop has mostly been exhausted, arguing that much of the derivatives-driven washout already took place. In a report released on Aug. 1, the analysts said Bitcoin fell below $58,000 on July 1, but average daily liquidations have since stayed well below this year’s typical $400 million to $500 million range. That, in their view, shows that even with macro shocks still affecting markets, liquidation-driven selling pressure has remained limited.
The report said investors are likely to stay defensive ahead of next week’s U.S. jobs report, which the analysts described as the next major macro catalyst after the Federal Reserve meeting. Rather than focusing on the risk of another forced liquidation wave, they said the more important question is whether spot Bitcoin ETF inflows will return once the market gains a clearer view of the Fed’s policy path. The analysts added that defensive positioning is likely to persist while the risk of further Fed rate hikes remains, and said traders have yet to see a signal that institutional buyers are turning aggressive or becoming price-insensitive.
Bitfinex analysts said in a report released on Aug. 1 that the forced-selling pressure behind Bitcoin’s late-June decline has largely faded, with derivatives traders mostly washed out during that move.
According to the report, Bitcoin fell below $58,000 on July 1. Since then, average daily liquidations have remained far below the $400 million to $500 million range that has been typical this year, suggesting that even as macro shocks continue to hit markets, the amount of forced selling has stayed limited.
The analysts wrote that crypto has fallen less than leveraged equity themes because the "fuel" for forced selling has already been exhausted.
Looking ahead, Bitfinex said investors are likely to remain defensive before next week’s U.S. jobs report, which it described as the next major macro catalyst after the Federal Reserve meeting.
In the analysts’ view, the bigger question is not whether another round of forced liquidations is coming, but whether spot Bitcoin ETF inflows can return once markets have a clearer read on the Fed’s path.
The report added: "We believe positioning will remain defensive while the risk of Fed hikes is still present. Whether institutional buyers are active or insensitive to price is the signal that traders have not yet seen."
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