Key takeaways:

• Bitfinex Bitcoin margin long positions have hit a two-year high, but arbitrage suggests it’s not just a bullish price indicator.

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• Bitcoin’s price is falling as tech stock valuations and gold gains prompt cautious, risk-averse investors.

The price of Bitcoin (BTC) fell to its lowest level in over two months on Thursday, retesting support at $84,000. This sell-off coincided with a broader move toward risk aversion after Microsoft (MSFT US) shares fell 11% on reports of increased capital spending and disappointing quarterly cloud server revenues.

Investors are currently examining why demand for bullish margin positions has surged to a two-year high despite prices falling 26% in the last 90 days. Some investors fear excessive leverage could trigger further forced liquidations, especially after $360 million was lost in BTC futures positions on Thursday.

Long margin demand on Bitfinex reached its highest level since November 2023 at 83,933 BTC. While the $7.3 billion notional position is significant, the borrowing cost remains below 0.01% per year because Bitfinex requires margin deposits in excess of the loan value. Many traders choose margin over futures to avoid the “carry cost”, which is currently around 5% per year for BTC futures.

Monthly BTC futures contracts typically trade at an annual premium of 5% to 10% compared to spot markets, which equates to longer settlement times. Periods of growth tend to push this ratio above the neutral 10% threshold. The last situation occurred in early February 2025, when the price of Bitcoin was close to $103,500.

Bitfinex Bitcoin growing longs are neutral due to offsetting arbitrage

Professional investors often operate a cash and carry strategy to take advantage of the exchange rate difference between the futures and hedging markets. Therefore, the net impact of rising longs on Bitfinex is likely neutral as arbitrage requires the simultaneous sale of BTC futures. Therefore, this boost in margin activity should not be interpreted solely as an expectation of price increases.

​The lack of confidence among Bitcoin traders can be partly attributed to concerns about overvaluation in the AI ​​sector. Sundar Pichai, Google’s CEO, said there are “elements of irrationality” and acknowledged the high energy demands of the ever-expanding artificial intelligence infrastructure. According to for the BBC, these valuations have led many analysts to express skepticism.

Microsoft, valued at $3.5 trillion, saw its stock decline accelerate after reporting $625 billion in “remaining performance obligations,” or unpaid contracts. Fortune excellent that almost $280 billion of this amount is linked to OpenAI. This raised eyebrows because Microsoft is both the main investor and cloud service provider for this entity.

Bitcoin’s decline on Thursday coincided with gold prices falling 8% in less than 30 minutes, though the metal made up half of those losses shortly thereafter. Bloomberg senior ETF analyst Eric Balchunas noted that trading volume for the SPDR Gold Shares ETF (GLD US) topped $25 billion on Thursday, a record high.

Related: Bitcoin vs Gold: Key Differences That Could Set BTC Up for a Big Rise

With gold and silver reaching a combined market capitalization of $43.4 trillion, concerns are growing about a potential “value-busting trade.” This suggests that investors are seeking refuge in limited assets even as fixed income yields remain above 3.5%. Ultimately, while long positions on Bitfinex margin are rising, supply chain data and derivatives show little evidence of a broader bullish recovery.