{"id":415018,"date":"2022-03-12T00:37:26","date_gmt":"2022-03-11T21:37:26","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen\/"},"modified":"2022-03-12T00:37:26","modified_gmt":"2022-03-11T21:37:26","slug":"bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen\/","title":{"rendered":"# Bitcoin derivatives metrics reflect traders\u2019 neutral sentiment, but anything can happen"},"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-6a3b5e853c0ce\" 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-6a3b5e853c0ce\" 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-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen\/#%E2%80%9D_Bitcoin_derivatives_metrics_reflect_traders_neutral_sentiment_but_anything_can_happen_%E2%80%9C\" >&#8221; Bitcoin derivatives metrics reflect traders\u2019 neutral sentiment, but anything can happen &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen\/#Data_shows_pro_traders_are_not_willing_to_hold_leveraged_longs\" >Data shows pro traders are not willing to hold leveraged longs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen\/#Options_traders_are_less_worried_about_further_downside_risk\" >Options traders are less worried about further downside risk<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoin_derivatives_metrics_reflect_traders_neutral_sentiment_but_anything_can_happen_%E2%80%9C\"><\/span>&#8221; Bitcoin derivatives metrics reflect traders\u2019 neutral sentiment, but anything can happen &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-128018ef>Bitcoin&#8217;s (BTC) last daily close above $45,000 was 66 days ago, but more importantly, the current $39,300 level was first seen on Jan. 7, 2021. The 13 months of boom and bust cycles culminated with BTC price hitting $69,000 on Nov. 10, 2021.<\/p>\n<p>It all started with the VanEck spot Bitcoin exchange-traded fund being rejected by the United States Securities and Exchange Commission (SEC) on Nov. 12, 2020. Even though the decision was largely expected, the regulator was harsh and direct on the rationale backing the denial.<\/p>\n<p>Curiously, nearly one year later, on Nov. 10, 2021, cryptocurrency markets rallied to an all-time high market capitalization at $3.11 trillion right as U.S. inflation as measured by the CPI index hit 6.2%, a 30-year high.<\/p>\n<p>Inflation also had negative consequences on risk markets, as the U.S. Federal Reserve acknowledged on Nov. 30, 2021, that inflation is more than just a &#8220;transitory&#8221; problem and hinted that tapering could occur sooner than expected.<\/p>\n<p>More recently, on March 10, the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/world\/us\/us-senate-aims-passage-govt-funding-bill-thursday-schumer-2022-03-10\/\">U.S. Senate passed a $1.5 trillion package<\/a>, which now awaits President Joe Biden&#8217;s signature. The new money is the first budget increase since former President Donald Trump left office.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Data_shows_pro_traders_are_not_willing_to_hold_leveraged_longs\"><\/span>Data shows pro traders are not willing to hold leveraged longs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To understand how professional traders are positioned, including whales and market makers, let&#8217;s look at Bitcoin&#8217;s futures and options market data. The basis indicator measures the difference between longer-term futures contracts and the current spot market levels. <\/p>\n<p>The Bitcoin futures annualized premium should run between 5% to 12% to compensate traders for &#8220;locking in&#8221; the money for two to three months until the contract expiry. Levels below 5% are extremely bearish, while the numbers above 12% indicate bullishness.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/d027e932-c059-42a0-b880-101e3d3691be.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 3-month futures annualized premium. Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>The above chart shows that this metric dipped below 5% on Feb. 11 and hasn&#8217;t yet shown signs of confidence from pro traders.<\/p>\n<p>Still, one would not be wrong in assessing that an eventual break of the $44,500 resistance would catch those investors off guard, creating a strong buying activity to cover short positions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Options_traders_are_less_worried_about_further_downside_risk\"><\/span>Options traders are less worried about further downside risk<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Currently, Bitcoin seems pretty undecided near $40,000, making it difficult to discern a direction in the market. The 25% delta skew is a telling sign whenever arbitrage desks and market makers overcharge for upside or downside protection.<\/p>\n<p>If those traders fear a Bitcoin price crash, the skew indicator will move above 10%. On the other hand, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ized excitement reflects a negative 10% skew. That is precisely why the metric is known as the pro traders&#8217; fear and greed metric.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/fc2d72dd-fca8-43a9-8b65-4d130c8c13ca.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 30-day options 25% delta skew: Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>As displayed above, from Feb. 28 until March 8, the skew indicator ranged between 7% and 11%. Albeit not precisely signaling fear, these option traders were overcharging for downside protection by a wide margin.<\/p>\n<p><strong>Related: <\/strong><strong><em>Bitcoin spikes above $40K as Russia sees &#8216;positive shifts&#8217; in Ukraine war dialogue<\/em><\/strong><\/p>\n<p>The past three days showed a remarkable improvement and currently, the 4% delta skew shows more of a balanced situation. From the BTC options markets perspective, there&#8217;s a similar risk for unexpected upward and downward price swings.<\/p>\n<p>The mixed data from Bitcoin derivatives offer an interesting opportunity for bulls. The cheap futures premium offers long leverage opportunities at a relatively low cost and the downside protection is running at its lowest level in thirty days.<\/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>\n<\/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 <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\/bitcoin-derivatives-metrics-reflect-traders-neutral-sentiment-but-anything-can-happen\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin derivatives metrics reflect traders\u2019 neutral sentiment, but anything can happen &#8220; Bitcoin&#8217;s (BTC) last daily close above $45,000 was 66 days ago, but more importantly, the current $39,300 level was first seen on Jan. 7, 2021. The 13 months of boom and bust cycles culminated with BTC price hitting $69,000 on Nov. 10,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":415019,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDMvYzgxMGIxOTUtOGU1Zi00OTFkLWFlYmUtNjdhZGI3MTQ0YWRiLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,74937,74858,74863,74860,75012,75849,75846,74939,70551,73785],"class_list":["post-415018","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-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-etf","tag-futures","tag-market-analysis","tag-inflation","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/415018","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=415018"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/415018\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/415019"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=415018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=415018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=415018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}