{"id":480525,"date":"2022-08-02T21:00:00","date_gmt":"2022-08-02T18:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoin-derivatives-show-a-lack-of-confidence-from-bulls\/"},"modified":"2022-08-02T21:00:00","modified_gmt":"2022-08-02T18:00:00","slug":"bitcoin-derivatives-show-a-lack-of-confidence-from-bulls","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoin-derivatives-show-a-lack-of-confidence-from-bulls\/","title":{"rendered":"# Bitcoin derivatives show a lack of confidence from 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-6a3db82623c3b\" 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-6a3db82623c3b\" 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-show-a-lack-of-confidence-from-bulls\/#%E2%80%9D_Bitcoin_derivatives_show_a_lack_of_confidence_from_bulls_%E2%80%9C\" >&#8221; Bitcoin derivatives show a lack of confidence from 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\/bitcoin-derivatives-show-a-lack-of-confidence-from-bulls\/#On-chain_analysis_corroborates_longer-term_bear_market\" >On-chain analysis corroborates longer-term bear market<\/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-show-a-lack-of-confidence-from-bulls\/#Bitcoin_derivatives_metrics_show_no_signs_of_%E2%80%9Cfear%E2%80%9D_from_pro_traders\" >Bitcoin derivatives metrics show no signs of \u201cfear\u201d from pro traders<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoin_derivatives_show_a_lack_of_confidence_from_bulls_%E2%80%9C\"><\/span>&#8221; Bitcoin derivatives show a lack of confidence from bulls &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-28d77a7a>Bitcoin (BTC) has been trending up since mid-July, although the current ascending channel formation holds $21,100 support. This pattern has been holding for 45 days and could potentially drive BTC towards $26,000 by late August.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-08\/18c0d2b4-d5d5-4730-bc29-95d65d7d2c05.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin\/USD 12-hour price. Source: TradingView<\/em><\/figcaption><\/figure>\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<p>The correlation to traditional assets is the main source of investors&#8217; distrust, especially when pricing in recession risks and tensions between the United States and China ahead of House Speaker Nancy Pelosi&#8217;s visit to Taiwan. According to CNBC, Chinese\u00a0officials <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2022\/08\/01\/stock-futures-are-flat-after-first-trading-day-in-august.html\" data-amp=\"https:\/\/www-cnbc-com.cdn.ampproject.org\/c\/s\/www.cnbc.com\/amp\/2022\/08\/01\/stock-futures-are-flat-after-first-trading-day-in-august.html\">threatened<\/a> to take action if Pelosi moved forward.<\/p>\n<p>The U.S. Federal Reserve&#8217;s recent interest rate hikes to curb inflation brought further  uncertainty for risk assets, limiting crypto price recovery. Investors are betting on a &#8220;soft landing,&#8221; meaning the central bank will be able to gradually revoke its stimulus activities without causing significant unemployment or recession.<\/p>\n<p>The correlation metric ranges from a negative 1, meaning select markets move in opposite directions, to a positive 1, which reflects a perfect and symmetrical movement. A disparity or a lack of relationship between the two assets would be represented by 0.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-08\/fae79329-3ab6-4224-add0-09f4fb775fa5.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>S&amp;P 500 and Bitcoin\/USD 40-day correlation. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>As displayed above, the S&amp;P 500 and Bitcoin 40-day correlation currently stands at 0.72, which has been the norm for the past four months.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"On-chain_analysis_corroborates_longer-term_bear_market\"><\/span>On-chain analysis corroborates longer-term bear market<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Blockchain analytics firm Glassnode&#8217;s &#8220;The Week On Chain&#8221; report\u00a0from Aug. 1 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/insights.glassnode.com\/the-week-onchain-week-31-2022\/\">highlighted<\/a> Bitcoin&#8217;s weak transaction and the demand for block space resembling the 2018\u201319 bear market. The analysis suggests a trend-breaking pattern would be required to signal new investor intake:<\/p>\n<blockquote><p>&#8220;Active Addresses [14 days moving average] breaking above 950k would signal an uptick in on-chain activity, suggesting potential market strength and demand recovery.&#8221;<\/p><\/blockquote>\n<p>While blockchain metrics 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_show_no_signs_of_%E2%80%9Cfear%E2%80%9D_from_pro_traders\"><\/span>Bitcoin derivatives metrics show no signs of \u201cfear\u201d from pro traders<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Retail traders usually avoid monthly futures due to their fixed settlement date and price difference from spot markets. On the other hand, arbitrage desks and professional traders opt for monthly contracts due to the lack of a fluctuating funding rate. <\/p>\n<p>These fixed-month contracts usually trade at a slight premium to regular spot markets as sellers demand more money to withhold settlement longer. Technically known as &#8220;contango,&#8221; this situation is not exclusive to crypto markets. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-08\/3f5b5e5b-b585-419d-9535-34c8108ddf12.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 3-month futures\u2019 annualized premium. Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>In healthy markets, futures should trade at a 4% to 8% annualized premium, enough to compensate for the risks plus the cost of capital. However, according to the above data, Bitcoin&#8217;s futures premium has been below 4% since June 1. The reading is not particularly concerning given that BTC is down 52% year-to-date.<\/p>\n<p>To exclude externalities specific to the futures instrument, traders must also analyze Bitcoin options markets. For instance, the 25% delta skew signals when Bitcoin whales and market makers are overcharging for upside or downside protection.<\/p>\n<p>If option investors fear a Bitcoin price crash, the skew indicator would 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\/2022-08\/528443a2-fdf0-4b63-8ec5-177416b599d6.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 30-day options 25% delta skew: Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>The skew indicator has been below 12% since July 17, considered a neutral area. As a result, options traders are pricing similar risks for both bullish and bearish options. Not even the retest of the $20,750 support on July 26 was enough to instill &#8220;fear&#8221; in derivatives traders.<\/p>\n<p>Bitcoin derivatives metrics remain neutral despite the rally toward $24,500 on July 30, suggesting that professional traders are not confident in a sustainable uptrend. Thus, data shows that an unexpected move above $25,000 would take professional traders by surprise. Taking a bullish bet might seem contrarian right now, but simultaneously, it creates an interesting risk-reward situation.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><em><u>author<\/u><\/em><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><\/p>\n<\/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-derivatives-show-a-lack-of-confidence-from-bulls\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin derivatives show a lack of confidence from bulls &#8220; Bitcoin (BTC) has been trending up since mid-July, although the current ascending channel formation holds $21,100 support. This pattern has been holding for 45 days and could potentially drive BTC towards $26,000 by late August. Bitcoin\/USD 12-hour price. Source: TradingView According to Bitcoin derivatives&#8230;<\/p>\n","protected":false},"author":1,"featured_media":480526,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDgvMTdiZjhiNjItMzVmYi00MTZhLWIxNWEtZjkzNTg2YzU0YzQyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,75012,75846,70550,3123,73785],"class_list":["post-480525","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-options","tag-derivatives","tag-futures","tag-federal-reserve","tag-leverage","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/480525","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=480525"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/480525\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/480526"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=480525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=480525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=480525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}