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Author: Admin | 2025-04-28
($)44Source: Glassnode, as of 10/14/24. Past performance is no guarantee of future results.Funding Rates: Over the past month, the 7-day moving average of annualized bitcoin futures funding rates rose by 8%, reflecting increased risk appetite as prices recovered. At the 49th percentile of its historical range, this indicates relatively neutral sentiment—especially given bitcoin’s historically bullish market bias—suggesting room for increased leverage among aggressive traders.Bitcoin ETPs and Price CorrelationOne of the standout findings this month is the growing influence of bitcoin ETPs on the market, marking a pivotal shift in bitcoin’s market structure. U.S. bitcoin ETP net inflows totaled $19.4 billion through October 14th. The correlation between weekly ETP inflows and bitcoin's returns has shown a strong positive relationship, with an R² value of 0.3422. This trend became even stronger when analyzing weeks from July 1st – September 22nd, which yielded an R² value of 0.5791. Interestingly, we also found that daily ETP flows also showed some modest predictive power for BTC price changes in the following after-hours trading period (R² = .0527), demonstrating a spillover of US “TradFi” market momentum into the 24/7/365 crypto markets.U.S. Bitcoin ETP Inflows Help Drive Price DiscoverySource: Farside, Glassnode, YTD through September 30th.These findings suggest that institutional participation via ETPs is playing an increasingly important role in bitcoin's price discovery process. When examining the reverse relationship, we found a less statistically significant impact. Bitcoin’s after-hours returns (price movements overnight, on weekends, and on holidays) showed some predictive power for U.S. bitcoin ETP inflows on the following trading day (R² = 0.1261), suggestive of institutional momentum-chasing. We found this relationship strengthened on a weekly basis, with one week’s bitcoin returns explaining the variance of the following week’s U.S. bitcoin ETP inflows with an R² value of 0.3422. However, when filtering for July 1st– September 22nd, we found that there was no statistically significant relationship between bitcoin’s returns in each given week and U.S. bitcoin ETP flows in the following week. These findings underscore the idea that institutional flows are leading price, not following it.Directionality of PredictionR2SlopeStatistically Significant?(α = 0.05)U.S. Bitcoin ETP Daily Net Flows (BTC) 🡒After-Hours BTC Return (%)0.0527y = 3E-05x – 0.0004YesAfter-Hours BTC Return (%) 🡒U.S. Bitcoin ETP Daily Net Flows (BTC)0.1261y = 2989.3x + 94.964YesU.S. Bitcoin ETP Weekly Net Flows ($bn) 🡒Next Week’s BTC Return (%)0.00002y = -0.0004x + 0.0151NoThis Week’s BTC Return (%) 🡒Next Week’s U.S. Bitcoin ETP Net Flows ($bn)0.2974Y= 6.9016x +
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