{"id":465858,"date":"2022-06-20T23:09:00","date_gmt":"2022-06-20T20:09:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoin-futures-enter-backwardation-for-the-first-time-in-a-year\/"},"modified":"2022-06-20T23:09:00","modified_gmt":"2022-06-20T20:09:00","slug":"bitcoin-futures-enter-backwardation-for-the-first-time-in-a-year","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoin-futures-enter-backwardation-for-the-first-time-in-a-year\/","title":{"rendered":"# Bitcoin futures enter backwardation for the first time in a year"},"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-6a33b89420abc\" 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-6a33b89420abc\" 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-futures-enter-backwardation-for-the-first-time-in-a-year\/#%E2%80%9D_Bitcoin_futures_enter_backwardation_for_the_first_time_in_a_year_%E2%80%9C\" >&#8221; Bitcoin futures enter backwardation for the first time in a year &#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-futures-enter-backwardation-for-the-first-time-in-a-year\/#The_Bitcoin_futures_premium_turns_negative_for_the_first_time_in_a_year\" >The Bitcoin futures premium turns negative for the first time in a year<\/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-futures-enter-backwardation-for-the-first-time-in-a-year\/#Analysts_expect_%E2%80%9Cmaximum_damage%E2%80%9D_ahead\" >Analysts expect \u201cmaximum damage\u201d ahead<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoin_futures_enter_backwardation_for_the_first_time_in_a_year_%E2%80%9C\"><\/span>&#8221; Bitcoin futures enter backwardation for the first time in a year &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>Bitcoin&#8217;s (BTC) month-to-date chart is very bearish, and the sub-$18,000 level seen over the weekend was the lowest price seen since December 2020. Bulls&#8217; current hope depends on turning $20,000 to support, but derivatives metrics tell a completely different story as professional traders are still extremely skeptical.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/bdc79ea1-52b2-44f2-b98d-185d1eea63dd.png\"><figcaption style=\"text-align: center;\"><em>BTC-USD 12-hour price at Kraken. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>It\u2019s important to remember that the S&amp;P 500 index dropped 11% in June, and even multi-billion dollar companies like Netflix, PayPal and Caesars Entertainment have corrected with 71%, 61% and 57% losses, respectively.<\/p>\n<p>The U.S. Federal Open Market Committee raised its benchmark interest rate by 75 basis points on June 15, and Federal Reserve Chairman Jerome Powell hinted that more aggressive tightening could be in store as the monetary authority continues to struggle to curb inflation. However, investors and analysts fear this move will increase the recession risk. According to a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/business.bofa.com\/en-us\/content\/market-strategies-insights\/global-economy-outlook-and-forecast.html\">Bank of America<\/a> note to clients issued on June 17:<\/p>\n<blockquote><p>\u201cOur worst fears around the Fed have been confirmed: they fell way behind the curve and are now playing a dangerous <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a> of catch up.\u201d <\/p><\/blockquote>\n<p>Furthermore, according to analysts at global investment bank JPMorgan Chase, the record-high total stablecoin market share within crypto is \u201cpointing to oversold conditions and significant upside for crypto markets from here.\u201d According to the analysts, the lower percentage of stablecoins in the total crypto market capitalization is associated with a limited crypto potential.<\/p>\n<p>Currently, crypto investors face mixed sentiment between recession fears and optimism toward the $20,000 support gaining strength, as stablecoins could eventually flow into Bitcoin and other cryptocurrencies. For this reason, analysis of derivatives data is valuable in understanding whether investors are pricing higher odds of a downturn.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Bitcoin_futures_premium_turns_negative_for_the_first_time_in_a_year\"><\/span>The Bitcoin futures premium turns negative for the first time in a year<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Retail traders usually avoid quarterly futures due to their price difference from spot markets, but they are professional traders&#8217; preferred instruments because they avoid the perpetual fluctuation of contracts&#8217; funding rate.<\/p>\n<p>These fixed-month contracts usually trade at a slight premium to spot markets because investors demand more money to withhold the settlement. This situation is not exclusive to crypto markets. Consequently, futures should trade at a 5%-to-12% annualized premium in healthy markets.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/499dee9b-f3b5-4942-9eda-02890f6fe4cd.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 3-month futures\u2019 annualized premium. Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>Bitcoin&#8217;s futures premium failed to break above the 5% neutral threshold, while the Bitcoin price firmly held the $29,000 support until June 11. Whenever this indicator fades or turns negative, this is an alarming, bearish red flag signaling a situation is known as backwardation.<\/p>\n<p>To exclude externalities specific to the futures instrument, traders must also analyze the Bitcoin options markets. For example, the 25% delta skew shows when Bitcoin market makers and arbitrage desks are overcharging for upside or downside protection.<\/p>\n<p>In bullish markets, options investors give higher odds for a price pump, causing the skew indicator to fall below -12%. On the other hand, a market&#8217;s <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ized panic induces a 12% or higher positive skew.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/23b661b6-0e70-4de1-a621-bd3ae4787edc.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 30-day options 25% delta skew: Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>The 30-day delta skew peaked at 36% on June 18, the highest-ever record and typical of extremely bearish markets. <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>arently, the 18% Bitcoin price increase since the $17,580 bottom was sufficient enough to reinstall some confidence in derivatives traders. While the 25% skew indicator remains unfavorable for pricing downside risks, at least it no longer sits at the levels which reflect extreme aversion.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Analysts_expect_%E2%80%9Cmaximum_damage%E2%80%9D_ahead\"><\/span>Analysts expect \u201cmaximum damage\u201d ahead<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Some metrics suggest that Bitcoin may have bottomed on June 18, especially since the $20,000 support has gained strength. On the other hand, market analyst Mike Alfred made it clear that, in his opinion, \u201cBitcoin is not done liquidating large players. They will take it down to a level that will cause the maximum damage to the most overexposed players like Celsius.\u201d<\/p>\n<p>Until traders have a better view of the contagion risk from the Terra ecosystem implosion, the possible insolvency of Celsius and the liquidity issues being faced by Three Arrows Capital, the odds of another Bitcoin price crash are high. <\/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 <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-futures-enter-backwardation-for-the-first-time-in-a-year\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin futures enter backwardation for the first time in a year &#8220; Bitcoin&#8217;s (BTC) month-to-date chart is very bearish, and the sub-$18,000 level seen over the weekend was the lowest price seen since December 2020. Bulls&#8217; current hope depends on turning $20,000 to support, but derivatives metrics tell a completely different story as professional&#8230;<\/p>\n","protected":false},"author":1,"featured_media":465859,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDYvMDc1YjIzMGItNDRjMS00ZjAyLWEyZTUtMGJiMDQ1MjI0MzUyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[77742,74862,74972,81209,74937,74863,74860,75012,74939,122378,70792,3123,73785,1377],"class_list":["post-465858","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bank-of-america","tag-bitcoin","tag-bitcoin-futures","tag-bitcoin-options","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-market-analysis","tag-terra","tag-jpmorgan-chase","tag-leverage","tag-markets","tag-netflix"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/465858","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=465858"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/465858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/465859"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=465858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=465858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=465858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}