{"id":451624,"date":"2022-05-23T22:00:00","date_gmt":"2022-05-23T19:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\/"},"modified":"2022-05-23T22:00:00","modified_gmt":"2022-05-23T19:00:00","slug":"bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\/","title":{"rendered":"# Bitcoin\u2019s current setup creates an interesting risk-reward situation for bulls"},"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-6a30774a39c59\" 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-6a30774a39c59\" 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\/bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\/#%E2%80%9D_Bitcoins_current_setup_creates_an_interesting_risk-reward_situation_for_bulls_%E2%80%9C\" >&#8221; Bitcoin\u2019s current setup creates an interesting risk-reward situation for bulls  &#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\/bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\/#The_macro_scenario_has_improved_and_BTC_miners_are_staying_busy\" >The macro scenario has improved and BTC miners are staying busy<\/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\/bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\/#Bitcoin_derivatives_metrics_are_neutral-to-bearish\" >Bitcoin derivatives metrics are neutral-to-bearish<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoins-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\/#Be_brave_when_most_are_fearful\" >Be brave when most are fearful<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoins_current_setup_creates_an_interesting_risk-reward_situation_for_bulls_%E2%80%9C\"><\/span>&#8221; Bitcoin\u2019s current setup creates an interesting risk-reward situation for bulls  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>The Bitcoin (BTC) chart has formed a symmetrical triangle, which currently holds a tight range from $28,900 to $30,900. This pattern has been holding for nearly two weeks and could potentially extend for another two weeks before price makes a more decisive movement.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/c1351ca3-54ad-4602-9c2a-d1934db98446.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin\/USD 12-hour price at Kraken. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>For those unfamiliar with technical analysis, a symmetrical triangle can be either bullish or bearish. In that sense, the price converges in a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of lower peaks and higher lows. The decisive moment is the support or resistance breakthrough when the market finally decides on a new trend. Thus, the price could break out in either direction.<\/p>\n<p>According to Bitcoin derivatives data, investors are pricing higher odds of a downturn, but recent improvements in global economic perspective might take the bears by surprise.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_macro_scenario_has_improved_and_BTC_miners_are_staying_busy\"><\/span>The macro scenario has improved and BTC miners are staying busy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>According to Cointelegraph, macroeconomic conditions driven by the United States helped drive crypto markets higher on May 23. Before the market opened, United States President Joe Biden announced plans to cut trade tariffs with China, boosting investors&#8217; morale.<\/p>\n<p>According to the latest estimates, Bitcoin&#8217;s network difficulty will reduce by 3.3% at its next automated readjustment this week. The change will be the largest downward shift since July 2021 and it\u2019s clear that Bitcoin&#8217;s downtrend has challenged miners&#8217; profitability. <\/p>\n<p>Still, miners are not showing signs of capitulation even as their wallets&#8217; movements to exchanges hit a 30-day low on May 23, according to on-chain analytics platform Glassnode.<\/p>\n<p>While miners&#8217; sentiment and flows are important, traders should also track how whales and market markers are positioned in the futures and options markets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_derivatives_metrics_are_neutral-to-bearish\"><\/span>Bitcoin derivatives metrics are neutral-to-bearish<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Retail traders usually avoid quarterly futures due to their fixed settlement date and price difference from spot markets. However, the contracts&#8217; biggest advantage is the lack of a fluctuating funding rate, hence the prevalence of arbitrage desks and professional traders.<\/p>\n<p>These fixed-month contracts usually trade at a slight premium to spot markets because sellers are requesting more money to withhold settlement longer. This situation is known technically as &#8220;contango&#8221; and is not exclusive to crypto markets. Thus, futures should trade at a 5% to 15% annualized premium in healthy markets. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/38a70194-1a5a-42c9-a4d7-87f5846dd7c8.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 3-month futures\u2019 annualized premium. Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>According to the above data, Bitcoin&#8217;s basis indicator has been below 4% since April 12. This reading is typical of bearish markets, but the fact that it has not deteriorated after the sell-off down to $25,400 on May 12 is encouraging.<\/p>\n<p>To exclude externalities specific to the futures instrument, traders also have to analyze Bitcoin options markets. The 25% delta skew is extremely useful because it shows when Bitcoin arbitrage desks and market makers are overcharging for upside or downside protection.<\/p>\n<p>If option investors fear a Bitcoin price crash, the skew indicator will move above 12%. 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 12% skew.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-05\/07a4b1f2-54fe-494a-9150-73072ade2d8c.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 30-day options 25% delta skew: Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>The skew indicator moved above 12% on May 9, entering the &#8220;fear&#8221; level as options traders overcharged for downside protection. Moreover, the recent 25.4% was the worst reading ever registered for the metric.<\/p>\n<p><strong>Related: <\/strong><strong><em>Bitcoin targets record 8th weekly red candle while BTC price limits weekend losses<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Be_brave_when_most_are_fearful\"><\/span>Be brave when most are fearful <span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In short, BTC options markets are still stressed and this suggests that professional traders are not confident in taking downside risk. Bitcoin&#8217;s futures premium has been somewhat resilient, but the indicator shows a lack of interest from leveraged long buyers.<\/p>\n<p>Taking a bullish bet might seem contrarian right now, but at the same time, an unexpected price pump would take professional traders by surprise. Therefore, it creates an interesting risk-reward situation for Bitcoin bulls.<\/p>\n<p><em>The views and opinions expressed here are solely those of the author 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\/bitcoin-s-current-setup-creates-an-interesting-risk-reward-situation-for-bulls\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin\u2019s current setup creates an interesting risk-reward situation for bulls &#8220; The Bitcoin (BTC) chart has formed a symmetrical triangle, which currently holds a tight range from $28,900 to $30,900. This pattern has been holding for nearly two weeks and could potentially extend for another two weeks before price makes a more decisive movement&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":451625,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvODA5NDg1MGYtNzY1Zi00OGM0LWI5NjgtYjJiYmE5OThjYzQyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,74937,74863,74860,75012,75846,74939,75042,4973,73785],"class_list":["post-451624","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-options","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-futures","tag-market-analysis","tag-mining","tag-china","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/451624","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=451624"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/451624\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/451625"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=451624"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=451624"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=451624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}