Flow

Rally

Bitcoin ETF

Bitcoin

Recent trends in the crypto market have <a href="https://www.bloomberg.com/news/articles/2024-04-25/bitcoin-btc-bulls-pause-leveraged-bets-as-demand-cools-post-halving" target="_blank" rel="noopener nofollow">indicated</a> a notable shift in trader behavior, particularly among those investing in Bitcoin. 
Using data from CryptoQuant, Bloomberg has <a href="https://cryptoquant.com/asset/btc/chart/derivatives/funding-rates?exchange=all_exchange&amp;window=DAY&amp;sma=0&amp;ema=0&amp;priceScale=log&amp;metricScale=linear&amp;chartStyle=column" target="_blank" rel="noopener nofollow">revealed</a> that the Bitcoin funding rate—the cost for traders to open long positions in Bitcoin’s perpetual futures—has turned negative for the first time since October 2023. 
<img loading="lazy" decoding="async" class="wp-image-605091 size-large" src="https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=860&amp;resize=860%2C507" alt="Bitcoin Funding Rates" width="860" height="507" srcset="https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=2220 2220w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=860&amp;resize=860%2C507 860w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=2048 2048w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2024/04/Screenshot-2024-04-25-at-14.11.59.png?w=1140 1140w" sizes="(max-width: 860px) 100vw, 860px" data-recalc-dims="1"> 
This change suggests a “cooling interest” in leveraging bullish bets on Bitcoin, coinciding with the fading impact of major market drivers. 
<h2 id="bitcoin-market-dynamics-post-halving">Bitcoin Market Dynamics Post-Halving</h2> 
The decline in Bitcoin’s funding rate correlates with a reduction in net inflows to US spot Bitcoin Exchange-Traded Funds (ETFs), which previously pushed the cryptocurrency to<a href="https://www.newsbtc.com/bitcoin-news/is-a-72k-bitcoin-surge-on-the-horizon-glassnodes-analysis/" target="_blank" rel="noopener "> record highs</a>. 
Despite the anticipation surrounding the Bitcoin Halving—an event reducing the reward for mining new blocks and theoretically lessening the supply of new coins—the price impact has been surprisingly muted. 
According to Bloomberg, this subdued response has compounded the effects of broader economic factors, such as geopolitical tensions and changes in monetary policy expectations, leading to increased risk aversion among investors. 
Following the latest Bitcoin halving, the market has not seen the bullish surge many expected. Instead, Bitcoin has only seen a correction of over 10%, from its all-time high (ATH) in March with prices stabilizing in the $63,000 region, at the time of writing. 
<img loading="lazy" decoding="async" class="size-medium" src="https://www.tradingview.com/x/JzB718yX/" alt="Bitcoin (BTC) price chart on TradingView" width="2770" height="1496"> 
As CryptoQuant’s Head of Research Julio Moreno pointed out, the recent downturn in Bitcoin’s funding rates to below zero underscores a “decreased eagerness” <a href="https://www.newsbtc.com/press-releases/bitcoin-in-serious-trouble-as-price-sweeps-prior-lows-how-will-this-defi-gem-react/" target="_blank" rel="noopener ">among traders</a> to take long positions. 
According to Bloomberg, this trend is supported by a significant drop in daily inflows to US spot Bitcoin ETFs and a reduction in open interest in Bitcoin futures at the Chicago Mercantile Exchange (CME), which indicates a broader cooling of enthusiasm for crypto investments. 
<blockquote class="twitter-tweet"> 
 [1/4] Bitcoin ETF Flow – 25 April 2024 – UPDATE <a href="https://t.co/ojRayOFlnu" target="_blank" rel="noopener nofollow">pic.twitter.com/ojRayOFlnu</a> 
 — BitMEX Research (@BitMEXResearch) <a href="https://twitter.com/BitMEXResearch/status/1783449880435818996?ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">April 25, 2024</a>
</blockquote> 
In a Bloomberg report, K33 Research analyst Vetle Lunde noted that the “current streak of neutral-to-below-neutral funding rates is unusual,” suggesting that the <a href="https://www.newsbtc.com/news/crypto-market-set-for-growth-predicts-glassnode-cofounders/" target="_blank" rel="noopener ">market</a> might be entering a price-consolidation phase. 
Notably, this period of reduced leverage activity could potentially lead to further price stabilization, but it also raises questions about the near-term prospects for Bitcoin’s recovery. 
<h2 id="adjustments-in-mining-difficulty-and-market-implications">Adjustments In Mining Difficulty And Market Implications</h2> 
Interestingly, alongside these market adjustments, Bitcoin’s mining difficulty has increased for the first time immediately following the <a href="https://www.newsbtc.com/bitcoin-news/samson-mow-on-bitcoin-halving-brace-for-supply-shock-omega-candle-in-sight/" target="_blank" rel="noopener ">fourth halving</a>. 
The difficulty adjustment, which occurs every 2016 block, increased by 2%, reaching a new high of 88.1 trillion, according to Bitbo data. 
<img loading="lazy" decoding="async" class="wp-image-605099 size-large" src="https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=860&amp;resize=860%2C484" alt="Bitcoin Mining Difficulty History Chart." width="860" height="484" srcset="https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=1155 1155w, https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=860&amp;resize=860%2C484 860w, https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2024/04/graph.png?w=1140 1140w" sizes="(max-width: 860px) 100vw, 860px" data-recalc-dims="1"> 
This adjustment contradicts past trends where the difficulty typically decreased post-halving due to reduced profitability pushing less efficient miners out of the market. 
This anomaly in mining difficulty suggests that despite lower rewards <a href="https://www.newsbtc.com/bitcoin-news/bitcoin-halving-hysteria-will-history-repeat-itself/" target="_blank" rel="noopener ">post-Halving</a>, miners remain active, possibly buoyed by more efficient mining technologies or strategic shifts within mining operations. 
This resilience in mining activity could help sustain the network’s security and processing power. Still, it reflects the complexities of predicting Bitcoin’s market dynamics solely based on historical halving outcomes. 
Featured image from Unsplash, Chart from TradingView

Is Bitcoin’s Rally Over? Leverage Drops As Halving Highs Fade: Report

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