Bitcoin (BTC) continues to hover above $100,000 after a brief pullback to the $94,500 price level earlier this week, which led to $1.6 billion worth of liquidations. While the top cryptocurrency attempts once again to decisively break through the $100,000 mark, analysts are confident that it’s only a matter of when, not if.
Bitcoin Futures Basis Below 15%, What Does It Mean?
In a post on X, Zaheer Ebtikar, co-founder of crypto fund Split Capital, highlighted that despite BTC trading above $100,000, the futures basis is still less than 15%. The analyst explained the difference between the asset’s price and futures basis with the following chart.
For the uninitiated, futures basis refers to the difference between the spot price of an asset, like BTC, and the price of its futures contract. A lower futures basis – in this case, below 15% – suggests that the futures market is not overly speculative, which can indicate healthy market conditions and potential for price growth.
It should be recalled that, prior to this week’s brief pullback, BTC experienced a flash crash to $90,500 on December 5, resulting in liquidations worth more than $1 billion, with the majority being long positions. Frequent price dumps are likely to deter bulls from opening new long positions.
Notably, futures basis can reach 30% or more during BTC bull runs. However, such a high percentage is rarely healthy for the underlying asset, as it indicates that the asset’s demand is driven more by speculation than organic growth.
Bitcoin’s price appears to have recovered most of its losses from the crash earlier this week. According to data from Coinglass, more than $254 million worth of liquidations occurred in the past 24 hours, with the majority being short positions.
Crypto ETF’s Continue To Witness Record Inflows
Now that the excess leverage in the market has been wiped out – both long and short positions – BTC can resume its uptrend. Crypto entrepreneur Charles Edwards noted on X:
Bitcoin quietly just had its highest daily close ever. Meanwhile funding rates are below normal, leverage still wiped and ETFs are seeing day after day of relentless inflows.
On December 11, US-based spot Bitcoin exchange-traded funds (ETF) inflows recorded consecutive 10 days of strong inflows, propelling the cumulative total net inflow to $34.58 billion. Donald Trump’s victory in the US presidential election is being touted as a major factor behind the significant inflows attracted by crypto ETFs.
As for what lies ahead, crypto analyst Michael van de Poppe shared his insights on X about BTC’s future trajectory. The analyst highlighted $97,844 as a key support level, stating that if BTC holds above this price area, it could create a new all-time high (ATH).
CryptoQuant analyst Darkfost also emphasized that BTC whales increased their holdings when the digital asset’s price was in the $95,000 – $99,000 range. At press time, BTC trades at $101,672, up 0.8% in the past 24 hours.
