Excess speculation is increasing in the virtual currency market, suggesting caution against Bitcoin. (Bitcoin) As the top cryptocurrency by market capitalization, bulls are looking to challenge record highs.
Notional open interest or dollar value pegged to active perpetual futures contracts associated with the meme cryptocurrency “Shiba Inu” (SHIB) According to CoinGlass, it exceeded $100 million for the first time since August 2023. SHIB futures size is 1,000 SHIB per contract with up to 25x leverage.
Over the past seven days, SHIB’s market capitalization has increased over 130% to $13.44 million, outpacing the CoinDesk 20 Index’s 22% rise. An increase in open interest due to a rise in market value means an inflow of new funds into SHIB.
However, this is a sign of over-speculation and indicates that a market-wide correction is imminent.
Previous instances of over $100 million in open interest on SHIB futures marked interim/local Bitcoin price highs.
SHIB is not alone in showing signs of speculative bubbles. According to data tracked by 10X Research, recent trading volumes in South Korea have averaged at or near $8 billion, a significant increase from the $1 billion per day before the Bitcoin bull market took hold. There is.
“We are seeing a wave of retail activity from altcoins to meme coins,” said Markus Thielen, founder of 10X Research, referring to the increase in trading volumes on Korean exchanges.
Thielen said inflows into U.S.-based spot ETFs are significantly outpacing the number of bitcoins created per day, and bitcoin could hit a new all-time high above $69,000 this week. he added. As a result, the supply-demand balance expanded to 1:10.
“The over-the-counter (OTC) trading desk trades with large institutional clients, and its total inventory data shows that balances have declined from nearly 10,000 Bitcoin in Q2 2023 to less than 2,000 Bitcoin. indicates that institutions such as Bitcoin ETF issuers will need to buy Bitcoin directly from exchanges through market makers.The demand-supply imbalance is 1:10 (daily mining ETF demand),” Thielen said.
Outflows from the Grayscale Spot ETF (GBTC) accelerated late last week, with the fund losing $600 million on Thursday, its largest single-day redemption in a month. Meanwhile, inflows into BlackRock’s IBIT, which had been between $500 million and $600 million for three consecutive days, settled at $202 million on Friday, according to 10X Research.
Thielen said the economic slowdown was a temporary phenomenon at the end of the month, and strong capital inflows could resume again this week.
“We expect inflows to BlackRock to resume this week. If Grayscale outflows fall below $100 million, Bitcoin will rise significantly,” Thielen noted.
At the time of writing, Bitcoin was trading at $63,300, an increase of 2% in 24 hours and 22% in 7 days.
