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The descending triangle pattern has put pressure on Bitcoin (BTC) for the past three weeks, and some traders cite it as a bullish reversal pattern, but $ 19,000 support is to determine the bullish fate. Remains at an important level of.
Bitcoin derivatives indicators have improved significantly since June 30, despite the lack of a clear price bottom, and positive news from global asset manager Van Eck could have eased traders’ sentiment. There is sex.
On July 5, two Virginia retirement funds announced a $ 35 million commitment to VanEck’s crypto-focused investment fund.
On the same day, Huobi’s exchange subsidiary received a Money Services Business (MSB) license from the US Financial Crimes Enforcement Network (FinCEN).The Seychelles-based company said licensing will lay the foundation for expanding the crypto business in the United States.
Some positive news came out on July 7 as Celsius Network, a decentralized financial staking and lending platform, announced that it had fully repaid its outstanding debt to the Maker (MKR) protocol.
Celsius is one of several cryptocurrency platforms on the verge of bankruptcy after historic losses across multiple positions. Forced sales of leveraged positions through exchanges and decentralized finance (DeFi) applications have accelerated the recent plunge in cryptocurrency prices.
Traders are now faced with mixed sentiment between the potential impact of the transmission and the optimistic view that $ 19,000 is gaining support. For this reason, analysis of derivative data is essential to understand whether investors are setting high odds for market downturn.
Retailers usually avoid quarterly futures due to fixed settlement dates and price differences from spot markets. However, the biggest advantage of the contract is that there is no variable funding rate. Therefore, the spread of arbitrage desks and professional traders.
These fixed-month contracts tend to trade at a small premium to the spot market as sellers demand more money to withhold payments longer. This situation is technically known as “contango” and is not limited to the crypto market. Therefore, futures should be traded in a healthy market with an annual premium of 5% to 10%.
Bitcoin’s annual futures premium went negative on June 28, indicating low demand from leveraged buyers. Still, the bearish structure did not last long as long as the indicators shifted to the positive area on July 4.
Related: Genesis Trading CEO confirms 3AC exposure to help parent company fill losses
To rule out the externalities inherent in Bitcoin futures products, traders also need to analyze the options market. For example, a 25% delta skew indicates that the arbitrage desk is overcharged for upward or downward protection.
Option traders have higher odds of price increases in the bull market, with skew indicators below -12%. On the other hand, the generalized fear sentiment of the market causes a positive skew of 12% or more.
June 18 recorded a record high 30-day delta skew, typical of a very bearish market. Still, the current 16% skew level shows that investors are reluctant to provide downside protection. This is reflected in the overbilling of put options.
It’s hard to tell if $ 17,580 was a low cycle, but some traders attribute this move to Three Arrows Capital’s failure to meet the margin call.
Some traders are looking for a “bottom of the generation,” but Bitcoin remains locked in the formation of a downward triangle, so there is still a long way to go before investors turn bullish.
3AC will be liquidated at the bottom of the generation and will rush everything to the super cycle
Hentaiavenger66 (@ hentaiavenger66) July 6, 2022
On the one hand, Bitcoin derivatives indicators have shown a gradual improvement since June 30th. Meanwhile, investors suspect further infections from such significant venture capital and crypto asset managers.
In some cases, regardless of the certainty at the bottom of the cycle, it is best to wait for a clearer market structure and avoid leverage at all costs.
The views and opinions expressed here are: author It does not necessarily reflect the views of Cointelegraph. All investment and transaction movements carry risks. When making a decision, you need to do your own research.
