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On March 20, long positions for Bitcoin (BTC) 
$105,942 on the Bitfinex exchange reached a six-month high. The long positions soared to 80,333 BTC (valued at $6.92 billion), marking a 27.5% increase since February 20. This rise has led some to speculate that the price of the largest cryptocurrency would also increase. However, Bitcoin’s price movements do not always align with leveraged trades on Bitfinex. Historical data shows that despite an increase in long positions, BTC prices can still decline.
The Relationship Between Rising Long Positions and Bitcoin Prices
The increase in Bitcoin long positions on Bitfinex does not necessarily correlate with price increases. For instance, between June 21 and July 12, 2024, large investors opened 13,620 new long positions. However, during that same period, the price dropped from $65,500 to $58,000. A similar trend occurred between August 29 and September 11, 2024, when 8,990 long positions were added, yet Bitcoin’s price fell, defying investor expectations.
Long positions do not always indicate a bullish trend in Bitcoin’s long-term price movements. In November 2024, while Bitcoin’s price exceeded $88,000, long positions fell by 30% by year-end. This suggests that investors are taking high risks in the long term while remaining patient despite market volatility. Historical data does not definitively link increased leveraged positions to positive price movements for the largest cryptocurrency.
Impact of Leveraged Trades on the Bitcoin Market
The cost of leveraged trades is also a significant factor in the Bitcoin market. On Bitfinex, the borrowing interest rate for BTC over a 60-day period is 3.14% annually. Meanwhile, the funding rate for Bitcoin futures is around 4.5%, creating arbitrage opportunities that allow investors to profit independently of market movements.
Despite increasing long positions on Bitfinex, a decline in long positions is observed on the OKX exchange. The long-short margin ratio for Bitcoin on OKX fell to its lowest level in three months at 15. Historically, when this ratio drops below 5, it reflects strong bearish expectations among market participants.
The Bitcoin options market is also a critical indicator for understanding the overall market trend. When investors anticipate a downturn, demand for put options rises, pushing the 25 delta skew above 6. Conversely, in bull markets, this ratio falls below -6. Between March 10-18, the Bitcoin options market showed a bearish trend but has now shifted to a neutral state, indicating large investors are equally weighing both upward and downward price potentials.
The Federal Reserve’s interest rate decision on March 19, 2025, also impacted the Bitcoin market’s stagnation. Rising inflation expectations and weakening economic growth projections have led investors to avoid risks. Heightened recession fears from global trade wars have further eroded investor confidence. Consequently, despite large investors increasing their long positions on Bitfinex, overall market sentiment does not strongly indicate bullish expectations.
Bitfinex is a global exchange founded in 2012 that facilitates cryptocurrency trading. It appeals to professional investors with leveraged trading, futures, and various trading tools. As one of the largest exchanges in terms of liquidity, it is preferred by large-scale investors.
