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Bitcoin Price Stalls at $64,807 as Cash-and-Carry Strategy Dominates Market

source-logo  crypto-news-flash.com 20 June 2024 07:51, UTC
  • Bitcoin’s price has been range-bound, influenced by the cash-and-carry arbitrage strategy.
  • Institutional trading behavior continues to reinforce range-bound expectations.

Bitcoin has been oscillating between $56,552 and $73,777 for several weeks, creating a highly volatile trading environment. Traders face the challenge of determining breakout directions within this unpredictable range.

Experts recommend waiting for a clear breach of resistance levels before making significant trades. As reported in Coin Market Cap news updates, this situation adds to the complexity of making significant trades.

Impact of Cash-and-Carry Arbitrage

Bitcoin’s recent price stagnation is primarily due to the cash-and-carry arbitrage strategy, as highlighted by Glassnode. This trading method involves taking a market-neutral position by purchasing BTC in the spot market (going long) and simultaneously selling its futures contract (going short) when trading at a premium.

According to The Week Onchain Newsletter, this trend is likely to persist. In their Week On Chain report published on June 18, Glassnode analysts noted,

The cash-and-carry trade continues, with a particular uptick by institutional traders, reinforcing an expectation of range-bound trading for the time being.

Recent Price Movements and Market Impact

On June 18, Bitcoin touched $64,602, the lower boundary of its range. The downward trend of the 20-day EMA at $67,249 and an RSI below 40 indicate bearish dominance. If $64,602 fails, Bitcoin could drop to $60,000. However, a rebound above the 20-day EMA could push it to $70,000.

Despite significant inflows into crypto investment products, Bitcoin’s price remains range-bound. Glassnode noted that increased cash-and-carry trades—long positions in U.S. Spot ETFs and shorting futures on the CME Group exchange—diminish the impact of these inflows.

Additionally, Bitcoin’s price dropped 6% in the past week due to the Federal Reserve’s restrictive stance, shaking investor confidence and leading to $32 million in liquidations over the past 24 hours.

Long-Term Trends and Future Prospects

Bitcoin is now in its fifth epoch following the halving on April 20, which reduced miner rewards from 6.25 BTC to 3.125 BTC, significantly impacting miner revenue. Despite a 12% correction from the all-time high of $73,800, analysts remain cautiously optimistic.

As previously highlighted by CNF, analysts like CrediBULL Crypto suggest a potential bottom for Bitcoin around the $64,000 level. If broken, Bitcoin could drop to critical support levels at $60,000, $52,000, and $46,000. Currently, Bitcoin (BTC) is priced around $64,946.79, reflecting a 0.24% decrease in the past day and a 4.87% decrease in the past week. View the BTC price chart below.