Key Points
- Bitcoin’s recent price drop is not a result of a “massive futures margin call,” according to analyst Checkmate.
- United States Bitcoin exchange-traded funds (ETFs) saw net outflows of over half a billion dollars on May 1.
Checkmate, a leading on-chain analyst at blockchain data firm Glassnode, has debunked the notion that the recent fall in Bitcoin’s price was due to a “massive futures margin call”.
Analysis of Bitcoin’s Price Drop
The drop in Bitcoin’s price to $56,500 on May 1 may have been surprising, but Checkmate suggests that this is a healthy correction in the broader bull market.
He pointed out that a gradual “de-leveraging” across Bitcoin futures has been happening since Bitcoin’s latest all-time highs in mid-March, which he believes is ending the “bull market excess”.
Checkmate’s analysis shows that the current market conditions differ from those three years ago, with funding rates gradually cooling off rather than abruptly dropping.
Bitcoin ETFs Witness Net Outflows
On May 1, United States spot Bitcoin exchange-traded funds (ETFs) saw net outflows of more than half a billion dollars. Investors’ reaction to Bitcoin’s price performance led to BlackRock’s iShares Bitcoin Trust (IBIT) losing nearly $40 million, marking its worst day on record.
Similar trends were observed across all ETF products, with negative flows across the board. The largest outflow was from Fidelity Investments’ Fidelity Wise Origin Bitcoin Fund (FBTC) at $191 million.
The recent price drop has resulted in a significant reset in crypto market sentiment, with the Crypto Fear & Greed Index returning to “neutral” territory at 43/100 – its lowest since September last year.
