Crypto education page XWIN Research Japan has revealed an ongoing divergence between Bitcoin spot demand and derivatives positioning. This divergence points to an evolving structure of the Bitcoin market, providing pivotal insights for long-term growth.
Bitcoin Spot ETFs Record Steady Net Inflows Since February
In a QuickTake post on CryptoQuant, educational institute XWIN Research Japan highlights that Spot Bitcoin’s ETF inflows have been quite strong since late February. According to a group of crypto experts, these ETFs have seen approximately $1 billion in net inflows per week, with nine consecutive days of positive returns at some point. Notably, this trend of positive ETF inflows extended into April, with the Bitcoin ETFs recording approximately $14.45 million in net inflows as of Friday. At the same time, the Ethereum ETFs saw about $23.38 million in net deposits.
According to the crypto research group, this confirms that institutional demand is robust in the market, despite current uncertainties. XWIN Research Japan notes that readings from the Coinbase Premium Index have also remained in positive territory, further reinforcing the growing bullish pressure from institutional investors in the US. Seeing as this positive trend has also persisted since early April, the analytics group explains that it reflects a broader structural recovery.
Bearish Derivatives Sentiment Raises Short Squeeze Potential
While institutions are actively accumulating Bitcoin, XWIN Research Japan notes that derivatives markets are actively preaching an opposing message. According to group’s analysis, funding rates remain negative, suggesting that Bitcoin traders are stacking positions in anticipation of downside moves.
The crypto experts explain that this bearish sentiment could be due to “recency bias” and is intended to avoid further losses after recent volatility spikes. However, this could be dangerous for leveraged traders, as institutional demand continues to pick up.
When this divergence between institutions and the derivatives market occurs, XWIN Research Japan notes that a typical short squeeze setup would emerge. If the Bitcoin price continues to rise due to institutional demand, leveraged shorts could be liquidated.
As of this writing, Bitcoin is trading at $77,590, with CoinMarketCap data showing a measly 0.23% gain over the past 24 hours. Meanwhile, the daily trading volume has declined by 39.19% and is valued at $16.37 billion.
