Crypto exchange Bitfinex issued a cautionary note on November 11, indicating that bitcoin may face a more significant reset, suggesting a potential extended downturn, following four consecutive days beneath its $75,717 short-term holder cost basis. That level represented the estimated average acquisition price of coins held for a duration of less than 155 days. Regaining it was central to the assessment of the exchange’s recovery. Among 14 comparable episodes since 2016, bitcoin regained the threshold within two weeks in 11 instances; three required between 57 to 114 days. The current break commenced on November 8, establishing November 22 as the two-week milestone. Bitfinex stated: “Rallies towards the short-term holder cost basis at $75,717 are likely to be sold until spot demand returns.”
Prices rebounded above $74,600 around 12:25 p.m. on Nov. 11, remaining below that threshold. Bitcoin eased to $74,157 by 5:35 p.m. Aggregate futures open interest, representing the total exposure in contracts that remain open and unsettled, reached 701,900 BTC around the daily open on November 11. Exposure increased by 3.3% since November 8, whereas prices experienced a decline of 2.6%, highlighting the ongoing pressure in bitcoin derivatives. Bitfinex cautioned that persistent bullish positioning heightened the likelihood of compelled selling. A measure dividing recent holders’ sale proceeds by acquisition costs reached 0.989 on Nov. 10, equivalent to receiving 98.9 cents per dollar spent. Separately, 1.6 million BTC acquired in the price range of $75,000 to $80,000 is currently underwater, indicating that its value has fallen below the initial purchase price. Such holdings may exert selling pressure during periods of market recovery.
On November 2, U.S. spot bitcoin exchange-traded funds experienced a loss of approximately $399 million. Corporate activity exhibited a varied landscape: Strategy Inc. acquired 1,036 BTC from November 2 to 8, whereas MARA Holdings Inc. reported the sale of 13,597 BTC over the preceding six weeks. Bitfinex determined that corporate purchasing was inadequate to counterbalance ETF selling. Withdrawals subsequently decelerated, as evidenced by U.S. bitcoin ETF flows, which recorded an outflow of $201 million on November 9 and $95 million on November 10. Bitfinex reported net outflows totalling $2.22 billion over the course of eight sessions starting from October 30. Reclaiming $75,717 alongside three consecutive inflow sessions would bolster its correction scenario. DWF Labs market insights lead Martin Lee provided a qualification regarding the dependence on fund flows. He contended that fund withdrawals and deposits generally aligned with price movements, thereby constraining their predictive utility.
Bitfinex also identified a discrepancy in bitcoin’s correlation with equities. In the 25 sessions subsequent to the Nasdaq 100’s record on October 6, bitcoin accounted for 91% of its losses during down days, while it realised 58% of its gains on up days. The index monitors 100 of the largest nonfinancial firms listed on Nasdaq. Weakness in altcoins has further intensified the pressure on bitcoin. Among 12 significant altcoins on Bitfinex, the median decrease from the close on September 21 was 27.8%, in contrast to bitcoin’s decline of 14.8%. Bitfinex attributed the gap to concentrated leverage and the migration of speculative capital to alternative avenues. For the Nov. 13 options expiration, Bitfinex anticipated a range of $71,600 to $75,800. A 10-year real Treasury yield, adjusted for anticipated inflation, exceeding 2.8% or a Nasdaq 100 drop below 26,606 may initiate long liquidations. That conditional scenario pointed toward 70,000-71,200.
