The recent Matrixport report shook the market, causing Bitcoin to plunge from $47,000 to $40,400. However, K33 Research’s findings offer reassurance, indicating a potential stabilization in the market. The excitement around a spot BTC ETF has contributed to a swift recovery in Bitcoin’s value.
K33 Research’s latest crypto report suggests optimism following last week’s downturn. Analysts observed that over half a billion dollars in positions were liquidated within an hour, and the futures market bubble was cleared, reducing the likelihood of a sell-the-news event in the coming hours.
Senior Analyst Vetle Lunde and Vice President Anders Helseth from K33 had previously warned about rapid losses due to long liquidations. However, with significant clearance of these positions, the fear has subsided. Open interest in futures dropped by 12% from January 2 to 6, and funding rates have returned to neutral, signaling a return to normalcy.
The experts view the record-breaking $6.1 billion in open positions at the Chicago Mercantile Exchange (CME) as a bullish sign. Lunde and Helseth note that CME premiums remain high but are trading in a healthier uptrend compared to the start of the year. They anticipate a shift from futures-based ETFs to spot ETFs following approval, which will likely reduce premiums and open interest (OI).
Aligning with the overall market sentiment, K33 experts predict approval may come as soon as Wednesday. They expect increased trading volumes and rapid adjustments in investor risk profiles. Additionally, ETF issuers are updating annual management fees, leading to lower costs and reduced BTC selling pressure, benefiting the market.