Analyst Breaks Down the Real Reason Why
Bitcoin (BTC) has reached a three-month low, and the price of Bitcoin (BTC) reverses post-election earnings after Donald Trump’s victory.
While initial sentiment was blamed on tariffs by U.S. President Donald Trump and the recent downturn in Bybit Hack, analysts now point to a more structural reason.
Why Bitcoin crashes, analysts provide new perspectives
cRYPTO analyst Kyle Chasse attributes the ongoing cryptocurrency market crash to the cash and carry trade that greets BTC prices for months. He explained that hedge funds exploited the low-risk arbitrage transactions involved Bitcoin Spot ETF (Exchange-traded funds) and CME futures.
“Bitcoin is collapsing. Wondering why? Cash and carry transactions that have now suppressed the price of BTC are now relaxing.” statement.
The strategies involved Buy Bitcoin Live ETF For example, people from BlackRock (IBIT) and loyalty (FBTC). It also involves Short circuit BTC Futures On CME, farming was about 5.68% annual rate of return.
According to analysts, some funds use leverage to boost double-digit returns. However, the deal is now collapsing, resulting in massive liquidity withdrawal from the market and freely dropping the price of Bitcoin.
The crash in cash and carrying trade has resulted in more than $1.9 billion in Bitcoin sold in the past week. This marks a significant decline in CME’s open interest Hedging funds Relax the position. It also caused the price of Bitcoin to fall by double digits within a few days.
According to Chasse, hedge funds will never bet on Bitcoin’s long-term price appreciation. Instead, they are No risk-free benefits in farming Use arbitrage. Now that the transaction is dead, they are rapidly increasing liquidity, enhancing the Bitcoin sell-off.
“Why does this happen? Because hedge funds don’t care about Bitcoin. They’re not betting on the BTC moon. They’re ploughing low-risk output. Now that the transaction is dead, they’re attracting liquidity – divest the market in a free fall.” additional.
Many traders accuse me of before determining cash and carrying breaks Trump’s active tariffs. recent, Tariffs to the EU It inspires fear in the market. recent Bybit Hack It also contributed to the sour investor sentiment.
Despite Bitcoin’s pressure, Kyle Chasse sees a way forward. More cash and carry is expected, which means forced sales will continue until all hedge fund positions are cleared. volatility As the leverage position is cleared, it may increase, resulting in sharp fluctuations in the price of Bitcoin.
If the analyst’s point of view is true, then Bitcoin will need real long-term holders to step in and absorb sales pressure. According to technical analysis, Bitcoin’s next target may be around $70,000, a key support level that can stabilize the market.
At this level, 6.76 million addresses hold approximately 2.64 million BTC tokens, with an average price of $65,296. Therefore, since the holder can prevent further losses, the region may provide substantial support for the Bitcoin price.
Analysts acknowledge that the demand driven by ETF is partly real, but is greatly influenced by arbitrage players seeking fast profits. Currently, the market is experiencing a painful but necessary reset. With it, traders and investors should volatility It can lay the foundation for Bitcoin’s next targeted bias.
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