According to information from K33 Research, the upcoming decisions of the United States Securities and Exchange Commission (SEC) regarding bitcoin ETF applications will not have a significant impact on the market. Experts came to this conclusion, taking into account recent events related to leverage. Specialists have thoroughly studied the situation in the industry.
Vetle Lunde, a senior analyst at K33, and Vice President Anders Helset initially assumed that traders could benefit after the approval of ETFs. However, recent events, including the mass liquidations that occurred on January 3, have significantly changed the market situation. Researchers noted that now the impact of closing long positions is not as great as before.
Experts also pointed to a 12% decrease in the conditional open interest for perpetual bitcoin contracts from January 2 to January 6. Funding rates have stabilized, indicating a calmer market situation compared to the previous week.
According to analysts, the reduction in the proportion of borrowed funds in the market has contributed to its resilience, which is important for realizing profits after the announcement of the bitcoin ETF. Meanwhile, open interest on the Chicago Mercantile Exchange reached a record $6.1 billion, and professional traders maintain moderate optimism.
Lunde and Helset added that CME premiums remain high, and suggested that they might decrease after the approval of ETFs. It is expected that the transition from futures ETFs to spot will lead to the closing of long positions on the CME.
The decision on the bitcoin ETF will be announced today, January 10, 2024, and analysts anticipate high market volatility in response to any outcome of this decision.
