{"id":343976,"date":"2021-09-25T02:30:00","date_gmt":"2021-09-24T23:30:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/all-bark-and-some-bite-chinas-bitcoin-ban-puts-traders-in-the-fear-zone\/"},"modified":"2021-09-25T02:30:00","modified_gmt":"2021-09-24T23:30:00","slug":"all-bark-and-some-bite-chinas-bitcoin-ban-puts-traders-in-the-fear-zone","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/all-bark-and-some-bite-chinas-bitcoin-ban-puts-traders-in-the-fear-zone\/","title":{"rendered":"# All bark and some bite. China\u2019s Bitcoin ban puts traders in the \u2018fear\u2019 zone"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 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-6a3df443aa245\" 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-6a3df443aa245\" 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\/all-bark-and-some-bite-chinas-bitcoin-ban-puts-traders-in-the-fear-zone\/#Pro_traders_showed_some_doubt_but_remained_neutral\" >Pro traders showed some doubt but remained neutral<\/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\/all-bark-and-some-bite-chinas-bitcoin-ban-puts-traders-in-the-fear-zone\/#Option_markets_confirm_traders_are_entering_the_%E2%80%9Cfear%E2%80%9D_zone\" >Option markets confirm traders are entering the \u201cfear\u201d zone<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># All bark and some bite. China\u2019s Bitcoin ban puts traders in the \u2018fear\u2019 zone <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>China bans Bitcoin (BTC), again.<\/p>\n<p>No, we\u2019re not <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">travel<\/a>ing back in time. On Sept. 24, the People\u2019s Bank of China (PBoC) published a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/www.pbc.gov.cn\/goutongjiaoliu\/113456\/113469\/4348556\/index.html\">new set of measures<\/a> to promote inter-departmental coordination on cracking down on crypto activity. The measures intended to \u201ccut off payment channels, dispose of relevant websites and mobile <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>lications in accordance with the law.\u201d<\/p>\n<p>Most investors may have missed the $3 billion BTC and $1.5 billion Ether (ETH) monthly options expiry that took place less than one hour before the crypto ban <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> came out. According to \u201cMolly\u201d, a former Bitcoin Magazine contributor, the remarks from China were <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/bigmagicdao\/status\/1441328777393426433\">originally posted<\/a> on Sept. 3.<\/p>\n<p>However, if some entity were aiming to profit from the negative price swing, releasing the news ahead of the expiry at 8:00 am UTC on Friday would have made more sense. For example, the $42,000 protective put option became worthless because the Deribit expiry price was $44,873. That option holder had a right to sell Bitcoin at $42,000, but there\u2019s no value in that if BTC expiry happens above that level.<\/p>\n<p>For the conspiracy theorists out there, the Chicago Mercantile Exchange (CME) Bitcoin futures expiry is the average price between 2:00 pm and 3:00 pm UTC. Consequently, the potential $340 million open interest settled near the $42,150 level. In the futures markets, buyers (longs) and sellers (shorts) are matched at all times, thus making it virtually impossible to guess which side has larger firepower.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-09\/1480fa11-12e0-43f2-ad49-405afb3a916c.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin price at Bitstamp in USD. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>Despite the $4,000 negative price swing, aggregate liquidations on leveraged long futures contracts were less than $120 million. This data should be highly worrisome for bears because it signals that bulls are not overconfident and that they are not using extreme leverage.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Pro_traders_showed_some_doubt_but_remained_neutral\"><\/span>Pro traders showed some doubt but remained neutral<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To analyze how bullish or bearish professional traders are, one should monitor the futures premium \u2014 also known as \u201cbasis rate.\u201d <\/p>\n<p>The indicator measures the difference between longer-term futures contracts and the current spot market levels. A 5% to 15% annualized premium is expected in healthy markets, which is a situation known as contango. <\/p>\n<p>This price gap is caused by sellers demanding more money to withhold settlement longer, and a red alert emerges whenever this indicator fades or turns negative, known as \u201cbackwardation.\u201d<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-09\/7e1d6aae-01f1-403d-9f49-2edb4e433641.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 3-month future contracts basis rate. Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>Notice how the sharp decrease caused by the negative 9% move on Sept. 24 caused the annualized futures premium to reach its lowest level in two months. The current 6% indicator lies at the bottom of the \u201cneutral\u201d range, ending a moderate bullish period that lasted until Sept. 19.<\/p>\n<p>To confirm whether this movement was specific to that instrument, one should also analyze options markets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Option_markets_confirm_traders_are_entering_the_%E2%80%9Cfear%E2%80%9D_zone\"><\/span>Option markets confirm traders are entering the \u201cfear\u201d zone<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The 25% delta skew compares similar call (buy) and put (sell) options. The metric will turn positive when \u201cfear\u201d is prevalent as the protective put options premium is higher than similar risk call options.<\/p>\n<p>The opposite holds when market makers are bullish, causing the 25% delta skew indicator to shift to the negative area. Readings between negative 8% and positive 8% are usually deemed neutral.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-09\/3b07fa28-af8a-4281-96df-e85326f42792.png\"><figcaption style=\"text-align: center;\"><em>Deribit Bitcoin options 25% delta skew. Source: laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The 25% delta skew had been ranging in the neutral zone since July 24, but it spiked to 10% on Sept. 22, signaling \u201cfear\u201d from options traders. After a brief retest of the neutral 8% level, today\u2019s Bitcoin price action has caused the indicator to rise above 11%. Once again, a level last seen two months ago, and very similar to BTC futures markets.<\/p>\n<p>Although no bearish signs emerged from the Bitcoin derivatives market, today\u2019s dip below $41,000 marked professional traders flip to \u201cfear\u201d mode. The result of this is that futures contracts traders are reluctant to open leverage long positions, while option markets display a premium for protective put options.<\/p>\n<p>Unless Bitcoin shows strength during the weekend, bears might profit from investors\u2019 current panic.<\/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\/all-bark-and-some-bite-china-s-bitcoin-ban-puts-traders-in-the-fear-zone\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# All bark and some bite. China\u2019s Bitcoin ban puts traders in the \u2018fear\u2019 zone &#8221; China bans Bitcoin (BTC), again. No, we\u2019re not traveling back in time. On Sept. 24, the People\u2019s Bank of China (PBoC) published a new set of measures to promote inter-departmental coordination on cracking down on crypto activity. The measures&#8230;<\/p>\n","protected":false},"author":1,"featured_media":343977,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvNTkyYTAxNDItNjk2My00Mzk5LTlhNjctNTgxMDg5YjVmNTIwLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,74937,74858,75845,74863,74860,75012,75846,74939,4973,73785],"class_list":["post-343976","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-options","tag-bitcoin-price","tag-bitcoin-regulation","tag-cme","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-futures","tag-market-analysis","tag-china","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/343976","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=343976"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/343976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/343977"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=343976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=343976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=343976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}