Bitcoin Margin Long Positions on Bitfinex Remain Strong Despite Bearish Season Trends
Activity on a prominent crypto exchange, Bitfinex, is showcasing a bullish trend despite concerns over bitcoin’s price during its historically bearish September season. Traders on Bitfinex are leveraging funds to establish optimistic positions, with perpetual funding rates turning positive and over-the-counter desks experiencing a surge in demand for higher strike call options.
Historical data reveals that September has typically seen a 4% drop in bitcoin prices since 2009, with bearish trends dominating the market in six of the last seven years. This year, some observers are cautious about bitcoin’s immediate price outlook given this historical pattern.
Contrary to these concerns, traders on Bitfinex are increasingly engaging in margin longs, which involve using borrowed funds to purchase BTC in the spot market. Since August 28, the number of margin longs on Bitfinex has risen by a net 3,000 BTC to almost 64,350 BTC. Simultaneously, the annualized interest rate on borrowed funds has spiked to over 20% in the last 10 hours.
In essence, traders are borrowing funds to acquire more BTC, expressing confidence that bitcoin will defy its typical bearish September trend this year. Notably, green lending rates and long positions on Bitfinex have historically served as bullish indicators, with significant spikes preceding major price increases.
Moreover, bitcoin perpetual futures across global platforms are displaying a renewed bullish sentiment, evident from the positive shift in open interest-weighted global average funding rates. Positive rates indicate that perpetual futures are trading at a premium to the spot price, indicating a prevalence of optimistic positions in the market.
Additionally, over-the-counter desks are witnessing a resurgence in demand for bitcoin call options that offer asymmetric payoffs during upward price movements. The options market is observing a substantial number of block calls, with whales strategically establishing long positions. Call spread strategies have also been observed on the OTC network Paradigm, further indicating a bullish sentiment in the market.
In conclusion, despite historical trends suggesting a bearish September for bitcoin, current market activities on Bitfinex and in bitcoin perpetual futures globally signal a growing bullish sentiment among traders and investors. This shift in market dynamics underscores a potential divergence from the typical seasonal patterns, with traders expressing optimism about bitcoin’s price trajectory in the near term.