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Crypto whales capitalize on Bitcoin’s 19% decline following U.S. spot ETF debut

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In the wake of the U.S. launch of spot exchange-traded funds (ETFs) for Bitcoin (BTC), the bitcoin premier cryptocurrency has experienced a significant downturn, plummeting nearly 19% to a current price of $39,770, as per the latest TradingView data.
This decline, since the ETFs began trading on January 11th, has sparked interest among crypto whales—entities known for their substantial holdings in digital tokens.
These crypto whales, particularly active on Bitfinex, a leading digital assets exchange ranked among the top 10 in trading volumes, are reportedly buying Bitcoin at these lower prices.
Bitfinex whales have a reputation for influencing market dynamics significantly. TradingView data highlighted an unusual trend over the past weekend: Bitcoin traded on Bitfinex at a premium of approximately $100 over the global average price.

BTC traded at a fat premium on Bitfinex over the weekend

As of now, this premium has slightly reduced to around $70, still markedly higher than that on other exchanges like Coinbase and Binance.
A notable factor in this scenario is the strategy of trade-weighted average price (TWAP) buying, as observed and estimated by a pseudonymous market analyst and trader, Byzantine General.

Oddly enough this Bitfinex $BTC TWAP is still going, Finex still trading at a premium.
This entity is the only one buying though, everyone else is selling 😆
— Byzantine General (@ByzGeneral) January 22, 2024

According to their analysis, around $50 million in Bitcoin has been accumulated on Bitfinex over three days. TWAP is an algorithmic approach used for distributing large orders over time, aimed at reducing slippage—the difference between a trade’s expected price and the price at which it is executed.
This intensified buying activity coincides with broader market pressures, including the sales from the FTX bankruptcy estate and withdrawals from the Grayscale Bitcoin Trust (GBTC), which have contributed to pushing Bitcoin’s price below $39,000 for the first time since early December.
Further evidence of the bullish sentiment among Bitfinex traders is the significant increase in BTC/USD long positions, or bullish leveraged bets.

Longs or bullish leveraged bets have surged in the past seven days.

In just one week, these have surged by nearly 8%, exceeding 73,000 contracts. This trend suggests a growing optimism among investors about Bitcoin’s potential rebound, despite the current market challenges.
The cryptocurrency landscape continues to be dynamic, influenced by various factors ranging from institutional movements to regulatory changes. As the situation evolves, it remains critical for investors and enthusiasts to stay informed and approach the market with a balanced perspective.

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