Bitfinex Warns Stronger Spot Demand Needed to Sustain Bitcoin's Q3 Rally
Bitcoin's impressive 42.5% quarterly gain has come to an end, leaving it in its strongest position since late 2024. However, analysts at Bitfinex warn that maintaining this momentum will require direct spot market buying.
In the derivatives market, open interest on the Chicago Mercantile Exchange (CME) fell by 16,075 BTC on September 28 following the monthly contract expiry. This decline in leverage has reduced the risk of cascading liquidations, according to Bitfinex's assessment.
Bitfinex notes that lower borrowed exposure does not automatically generate buying, the catalyst must come from spot market investors. Meanwhile, derivatives data revealed that Bitcoin-denominated open interest did not track price gains into late September. The narrowing basis premiums on futures contracts have weakened the incentive for cash-and-carry basis trade strategies between spot and derivatives.
Despite institutional purchases across US-listed exchange-traded funds slowing down in the final week of September, daily net inflows remained positive for nine straight sessions. BlackRock's IBIT led weekly inflows with $1.16 billion, followed by Fidelity's FBTC with $701.6 million.
Bitfinex's absorption model calculated that ETFs went from absorbing 25.6 times daily miner issuance down to 1.8 times by the close of September 29. The market requires funds to absorb roughly five times daily issuance, equivalent to about $190 million per session, to neutralize liquid market supply.