Bitcoin prices rose above $65,000 on Monday morning, sandwiched between a sixth straight week of spot ETF outflows, a hawkish Federal Reserve debut, and a U.S.-Iran peace deal that briefly boosted risk assets.
The move comes after U.S. and Iranian officials reported progress in peace talks in Switzerland, based on a memorandum of understanding signed last week that formally ended more than 100 days of conflict.
The deal reopened the Strait of Hormuz, through which about a fifth of the world’s oil flows, and sent oil prices to a three-month low. The initial geopolitical easing pushed Bitcoin prices up to $66,230 late last week before reaffirming the macro picture.
This reassertion came in the form of new Fed Chairman Kevin Warsh, whose first FOMC meeting was a hawkish reset. Mr. Warsh expressed a strict commitment to getting inflation back to the 2% target. This attitude was partly due to the fact that the CPI in May was 4.2%, well above the target.
CME Fedwatch currently puts the probability of a rate hike at the July meeting at about 36%, with the market pricing in at least one 25 basis point hike by the end of the year. The U.S. dollar index rebounded to a range of 100.6 to 100.8 on the back of the Fed’s stance, a headwind that has historically weighed on Bitcoin prices.
Against this backdrop, the US Spot Bitcoin ETF recorded net outflows for six consecutive weeks. According to data from SoSoValue, funds had outflows of $226.8 million in the week ending June 18, bringing the six-week total to $5.94 billion and the longest consecutive weekly outflow on record. U.S. spot ETFs posted record outflows of $6.35 billion over the past 30 days, according to Galaxy Research.
However, the pace of outflow is slowing. In the first week of June, $1.72 billion was drained from the fund. Last week, that number dropped to just over $226 million. Bitfinex analysts note that funding rates remain subdued and leverage has not increased, pointing to spot order book rather than speculative positioning as the driver of recent price movements.
“Investors remain cautious given the changing macro regime, but institutional and Treasury buyers continue to offer marginal value,” Bitfinex said in a note. bitcoin magazine. “This combination indicates an undervalued market rather than an overheated one, leaving room for further upside if spot demand strengthens.”
Bitfinex also flagged a pattern in the margin data. $BTCAccording to the note, /USD margin longs have built up within a range of 10-25% from the recent downside, a positioning pattern that historically precedes medium-term bottoms.
Strategy and effort will accumulate some Sat
Corporate buyers showed no signs of retreating. Strategy (NASDAQ:MSTR) revealed on Monday that it acquired 520 Bitcoins last week for approximately $35 million, at an average Bitcoin price of $67,068. This is the third consecutive week of purchase. This brings the total number of shares held by the company to 847,363 shares. $BTC. The company also increased its U.S. dollar reserves by $300 million to $1.4 billion to support its preferred stock program’s dividend obligations.
It’s been a remarkable week for the broader Bitcoin treasury space, with Strive, Inc. (NASDAQ: ASST) buying strategies this week. The Dallas-based company revealed it purchased 759 Bitcoins for approximately $50 million at an average price of $65,850 per Bitcoin, bringing its total holdings to $19,864. $BTC.
This is Strive’s largest single-week acquisition in recent months, a significant increase from 73 companies. $BTC I bought it the week before.
Bitcoin price drivers
The Bitcoin options market tells a more nuanced story than the headline price suggests. One-week implied volatility has retreated from 60% to 36%, and the 25-delta put skew has retreated from June’s extremes, suggesting the rush for downside protection has subsided.
Realized volatility exceeds implied volatility. The realized volatility is over 42%, while the 1-month IV is close to 39%. This means that recent price movements have exceeded what the options market has priced in. The large negative gamma cluster is located around $62,000, where about $1.8 billion of short gamma is concentrated.
According to Bitfinex, option traders continue to pay a premium for downside protection, with volatility premiums and the 25 delta skew indicator remaining elevated after the June pullback.
Bitcoin price is about 50% below October’s Bitcoin price record of $126,080, and the next catalyst to watch is changes in guidance from Mr. Warsh and the progress of the CLARITY Act through Congress.
This article, Bitcoin Price Rise Above $65,000 Amid Slow ETF Outflows, Iran Deal and Fed Pull Up in the Opposite Direction, was originally published in Bitcoin Magazine and is written by Mika Zimmerman.
