{"id":298321,"date":"2021-07-14T03:15:00","date_gmt":"2021-07-14T00:15:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/uncertainty-prevails-as-december-2021-bitcoin-futures-show-an-inverted-pattern\/"},"modified":"2021-07-14T03:15:00","modified_gmt":"2021-07-14T00:15:00","slug":"uncertainty-prevails-as-december-2021-bitcoin-futures-show-an-inverted-pattern","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/uncertainty-prevails-as-december-2021-bitcoin-futures-show-an-inverted-pattern\/","title":{"rendered":"# Uncertainty prevails as December 2021 Bitcoin futures show an inverted pattern"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2897063505f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2897063505f\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/uncertainty-prevails-as-december-2021-bitcoin-futures-show-an-inverted-pattern\/#Focus_on_the_broader_picture_is_the_3-month_premium_below_4\" >Focus on the broader picture, is the 3-month premium below 4%?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Uncertainty prevails as December 2021 Bitcoin futures show an inverted pattern <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>It&#8217;s not yet known whether Binance&#8217;s recent <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> of\u00a0 being temporarily suspended from the U.K.\u2019s financial system\u00a0is the main driver behind today&#8217;s Bitcoin (BTC) price drop. As Cointelegraph reported, the exchange sent emails to affected customers but has not given any details.<\/p>\n<p>Regardless of the reason behind the price weakness, derivatives contracts started to display some oddities, and this could be a troubling sign.<\/p>\n<p>Bitcoin quarterly futures are the preferred instruments of whales and arbitrage desks. Although it might seem complicated for retail traders due to their settlement date and price difference from spot markets, their most significant advantage is the lack of a fluctuating funding rate.<\/p>\n<p>When traders opt for perpetual contracts (inverse swaps), there is a fee usually charged every 8-hours that will change depending on which side demands more leverage. On the other hand, fixed-date expiry contracts typically trade at a premium from regular spot market exchanges.<\/p>\n<p>This effect occurs as sellers are postponing settlement, therefore requesting compensation for this time.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-07\/3a80cdaf-818b-4be6-91e9-99eadc4c7920.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\">Bitcoin futures annualized premiums. Source: BitcoinFuturesInfo.com<\/figcaption><\/figure>\n<p>As depicted above, the Sept. 24 contract is trading with a 2.2% annualized premium at Deribit, while the Dec. 31 contract is at 3.8%. This curve is precisely what one should expect in healthy markets because a longer settlement period would usually cause sellers to request a more substantial premium.<\/p>\n<p>Keep in mind that there&#8217;s a decent &#8216;Cash and Carry&#8217; activity being deployed by arbitrage desks, buying Bitcoin while simultaneously shorting (selling) the futures contract. These players aren&#8217;t effectively betting on a negative price swing as their net exposure is flat, but this activity limits the premium on futures contracts.<\/p>\n<p><strong>Related: <\/strong><strong><em>Bitcoin price is down, but here\u2019s 3 reasons why $1B liquidations are less frequent<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Focus_on_the_broader_picture_is_the_3-month_premium_below_4\"><\/span>Focus on the broader picture, is the 3-month premium below 4%?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Therefore, a couple of exchanges presenting a flat or slightly inverted futures&#8217; curve should not be interpreted as a bearish indicator. More importantly, investors should measure the 3-month futures premium, which should stay above 4% annualized. <\/p>\n<p>Whenever this metric falls below that, it indicates a lack of interest in leverage longs and is interpreted as bearish.<\/p>\n<p>Currently, the average September annualized basis (premium) of the four exchanges examined is running at 3.3%, which is definitively worrisome. <\/p>\n<p>However, this is not unusual after the market experienced a 50% correction. This situation should simply be interpreted as a lack of confidence from buyers instead of an alarming bearish sign.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/uncertainty-prevails-as-december-2021-bitcoin-futures-show-an-inverted-pattern\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Uncertainty prevails as December 2021 Bitcoin futures show an inverted pattern &#8221; It&#8217;s not yet known whether Binance&#8217;s recent news of\u00a0 being temporarily suspended from the U.K.\u2019s financial system\u00a0is the main driver behind today&#8217;s Bitcoin (BTC) price drop. As Cointelegraph reported, the exchange sent emails to affected customers but has not given any details&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":298322,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDcvYWMwNzdmNTAtZDUwNC00ZmRhLTkzMmUtYTQ0YzBmMmVmMzU3LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[75014,74862,74972,74937,74863,74860,75012,75540,74939,73785,73438],"class_list":["post-298321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-binance","tag-bitcoin","tag-bitcoin-futures","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-kraken","tag-market-analysis","tag-markets","tag-wyoming"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/298321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=298321"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/298321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/298322"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=298321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=298321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=298321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}