{"id":342467,"date":"2021-09-22T04:10:51","date_gmt":"2021-09-22T01:10:51","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/key-bitcoin-options-fear-indicator-reflects-traders-regulatory-concerns\/"},"modified":"2021-09-22T04:10:51","modified_gmt":"2021-09-22T01:10:51","slug":"key-bitcoin-options-fear-indicator-reflects-traders-regulatory-concerns","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/key-bitcoin-options-fear-indicator-reflects-traders-regulatory-concerns\/","title":{"rendered":"# Key Bitcoin options &#8216;fear&#8217; indicator reflects traders&#8217; regulatory concerns"},"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-6a288a9ba3811\" 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-6a288a9ba3811\" 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\/key-bitcoin-options-fear-indicator-reflects-traders-regulatory-concerns\/#Is_China_really_the_root_of_the_recent_correction\" >Is China really the root of the recent correction?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/key-bitcoin-options-fear-indicator-reflects-traders-regulatory-concerns\/#Options_markets_confirm_investors_lack_of_conviction\" >Options markets confirm investors&#8217; lack of conviction<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Key Bitcoin options &#8216;fear&#8217; indicator reflects traders&#8217; regulatory concerns <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>After 46 consecutive days of trading above $42,000, Bitcoin (BTC) price started to show weakness on Sept. 21. Over the last three days, the 13% accumulated loss was enough to erase the hard-earned gains added since Aug. 6. Historicals also show that the previous bearish cycle took 79 days to regain the all-important $42,000 level.<\/p>\n<p>Traders&#8217; attention turned to the start of the U.S. Federal Reserve&#8217;s monetary meeting, where the financial authority is expected to indicate whether it will curtail the $120 billion monthly asset repurchase stimulus program. Curiously, as all this takes place, China&#8217;s equity markets, as measured by the iShares MSCI China ETF ($MCHI), rebounded 1% on Sept. 21.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_China_really_the_root_of_the_recent_correction\"><\/span>Is China really the root of the recent correction?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>arent disconnection between Bitcoin&#8217;s performance and the global markets&#8217; slight recovery caused investors to question whether cryptocurrency regulation is playing a role in the current bearish scenario. <\/p>\n<p>Today U.S. Securities and Commission (SEC) Chair Gary Gensler spoke to the Washington Post, and during the interview, he called stablecoins instruments for use at the &#8220;casino gaming tables.&#8221;<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Groan. The US regulatory clampdown on crypto which has been brewing the past six months just looks like it\u2019s going to get uglier &amp; uglier with each passing week. Not even sure what impact it\u2019s going to have on the markets, but there sure isn\u2019t much to be optimistic about rn. <\/p>\n<p>\u2014 Grant Gulovsen, Esq. (@gulovsen) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/gulovsen\/status\/1439416471319465992?ref_src=twsrc%5Etfw\">September 19, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>As noted by the attorney Grant Gulovsen, the looming shadow of regulation is expected to have a short-term bearish impact, and investors in any market hate uncertainties regarding what products and services will be allowed.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-09\/fecd9b3f-b69e-4d30-a407-32ed1da1d7db.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin price in USD at Coinbase. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Notice how the $42,000 level was crucial in determining the end of the mini-bear cycle that was supposedly initiated by Elon Musk&#8217;s remarks on Bitcoin mining energy use on May 12.<\/p>\n<p>To effectively measure how professional traders are pricing the risk of the further price collapse, investors should monitor the 25% delta skew, which compares similar call (buy) and put (sell) options side-by-side. It will turn positive when the protective put options premium is higher than similar risk call options.<\/p>\n<p>A skew indicator oscillating between -7% and +7% is usually deemed neutral. On the other hand, the metric shifts above this range whenever the downside protection is more costly, typically a &#8220;fear&#8221; indicator.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-09\/e3f2221d-926f-4170-b477-c9aca4dcacb1.png\"><figcaption style=\"text-align: center;\"><em>Deribit Bitcoin options 25% delta skew. Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>As shown above, Bitcoin options traders have been neutral since July 25, when the indicator dropped below the 7% threshold. However, the recent price action caused shorter-term options traders to enter &#8220;fear&#8221; mode after the metric reached 9%.<\/p>\n<p><strong>Related: <\/strong><strong><em>U.S. Treasury Dept sanctions crypto OTC broker Suex for alleged role in facilitating transactions for ransomware attacks<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Options_markets_confirm_investors_lack_of_conviction\"><\/span>Options markets confirm investors&#8217; lack of conviction<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To exclude externalities specific to this options instrument, one should also analyze the perpetual futures markets. <\/p>\n<p>Unlike regular monthly contracts, perpetual futures prices are very similar to those at regular spot exchanges. This feature makes retail traders&#8217; lives a lot easier because they no longer need to calculate the futures premium or manually roll over positions near expiry.<\/p>\n<p>The funding rate was introduced to balance the exchange&#8217;s exposure and it is charged from longs (buyers) when they are demanding more leverage. However, when the situation is reversed and shorts (sellers) are over-leveraged, the funding rate goes negative, so they become the ones paying the fee.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-09\/79bde535-fe1b-4e15-b0e6-5898871583de.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 8-hour USDT\/USD margin futures funding rate. Source: Bybt<\/em><\/figcaption><\/figure>\n<p>The chart above shows that Bitcoin&#8217;s funding rate has constantly shifted to the negative side, despite not being sustainable or relevant. For example, a 0.05% rate charged every 8 hours is equivalent to 1% per week, which shouldn&#8217;t force any derivatives trader to close their position.<\/p>\n<p>Therefore, options markets data validates the &#8220;fear&#8221; indicator coming from the positive 25% delta options skew. There is a lack of conviction from buyers using derivatives markets, which is likely related to the recent negative regulatory concerns. The latest victim to regulatory pressure came from Coinbase exchange&#8217;s decision to avert plans for offering a crypto lending program.<\/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<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 <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> 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\/key-bitcoin-options-fear-indicator-reflects-traders-regulatory-concerns\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Key Bitcoin options &#8216;fear&#8217; indicator reflects traders&#8217; regulatory concerns &#8221; After 46 consecutive days of trading above $42,000, Bitcoin (BTC) price started to show weakness on Sept. 21. Over the last three days, the 13% accumulated loss was enough to erase the hard-earned gains added since Aug. 6. Historicals also show that the previous&#8230;<\/p>\n","protected":false},"author":1,"featured_media":342468,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvYjA5ZTc1YTYtNjI0OC00MzEzLTk5MTItNjA2MjI2MTQxYmVmLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74972,81209,74937,74858,74863,75012,74939,70550,73785],"class_list":["post-342467","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-futures","tag-bitcoin-options","tag-bitcoin-price","tag-bitcoin-regulation","tag-cryptocurrencies","tag-derivatives","tag-market-analysis","tag-federal-reserve","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/342467","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=342467"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/342467\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/342468"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=342467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=342467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=342467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}