The futures market for Bitcoin (BTC) futures is a relatively new market which is still immature and not particularly liquid. Therefore, it’s not surprising that Bitcoin (BTC) futures trading volumes have been low.
The crypto market has seen a lot of price action over the last few days, and it is only natural to want to understand what made this space tick. A new analysis from TradingView charts and analysis shows there was great activity in the Bitcoin futures market at the time when the price of Bitcoin was on the decline. This shows that traders in the futures market are aware of the current trends and are able to predict the movements of Bitcoin.
The price of Bitcoin was just under $41K at the end of the trading session today, which is a long way from the $19K it was at the start of the year. That $41K rise in price makes Bitcoin the best performing currency of 2018, and it has made it the second best performing currency over the past half-decade. But many traders who missed out on that pump are now wondering why they didn’t buy earlier in the year, a question that never really bothered me.. Read more about when does crypto market close and let us know what you think.Sometimes all bitcoin (BTC) needs to go up 10% is a positive comment from someone like Elon Musk. Tesla’s CEO is being cited as the culprit for the recent slump, after the company’s 12… May announced that she would no longer accept bitcoin payments due to environmental concerns. Musk has since said he is considering other crypto-currencies that require 99% less energy. However, the situation was rectified on the 13th. June turned when Musk assured the public that Tesla would no longer sell bitcoins. The announcement also states that the electric car maker will start accepting payments in BTC again if bitcoin mining is 50% clean energy.
In bear markets, primary dealers trade with caution
While retail investors and algorithmic trading robots act immediately when upward or downward signals and news appear, high-level traders typically act more cautiously. Those who have been in the crypto currency markets long enough know that positive news can be ignored or heavily downplayed in bear markets. On the other hand, even potentially negative news seems to have little or no impact during an up cycle. For example, the Kucoin was launched on the 26th. September 2020 hacked for $150 million. The following week, on 1. In October, the U.S. Commodity Futures Trading Commission filed a complaint against BitMEX for operating an unregistered trading platform and violating anti-money laundering rules. Two weeks later, police reportedly questioned the founder of OKEx and forced the exchange to suspend withdrawals of cryptocurrencies. If this series of negative news had occurred when bitcoin was in a flat or declining phase, the price would likely have stalled during a declining market. Coinbase bitcoin price in US dollars, September 2020. Source: TradingView As the chart above shows, bitcoin had virtually no negative impact in late September and October 2020. By the end of November 2020, bitcoin had actually risen 74% in two months. This is the main reason why the best traders tend to ignore positive news during bear markets and vice versa.
Neutral 3-month forward premium
The seller of a futures contract typically charges a premium over the price in an ordinary cash market. This is not exclusive to cryptocurrency markets and occurs in all derivatives markets because in addition to the liquidity risk of the exchange, the seller delays settlement, resulting in a higher price. The premium for 3-month futures (strike price) generally trades at an annual premium of 5% to 15% in healthy markets. When futures contracts trade below the normal spot trading price, it indicates short-term bearish sentiment. Huobi 3-Month Bitcoin Futures Basis. Source: Skewed As noted above, the futures base is at its lowest point since the 20th century. May was below 11% and it repeatedly flirted with bearish territory, testing 5%. The current level indicates a neutral position for the main traders.
Option tilt means no more fear
A 25% skew delta compares similar call and put options side by side. It becomes positive if the premium of a protective put option is higher than that of a call option with a similar risk. Conversely, when market sentiment is bullish, the Delta Skew 25% indicator moves into negative territory. deribit options bitcoin 25% delta skew. Source : laevitas.ch The chart above confirms that major traders, including arbitrage services and market markers, are currently uncomfortable with the price of bitcoin as the neutral option premium is higher. However, the current positive trend of 7% is a far cry from the exaggerated fears of 20% seen in late May. The derivatives markets are showing no signs of excitement among key traders over the recent $40,000 increase. Leveraged buyers, on the other hand, have the opportunity to build positions. Strong rallies usually occur when investors least expect them, and the current scenario seems to be a perfect example. The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. So you need to do your own research before making a decision.Bitcoin is having a rough day. Nearly all cryptocurrencies are down, with most of the top 20 coins either in the red or close to it. Of the top 10 coins, only one is up, XRP (the third largest cryptocurrency by market cap). That’s a major change from the previous day, when XRP was up by more than 10% and all of the top 20 coins were in the green.. Read more about will cryptocurrency crash and let us know what you think.
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