{"id":524760,"date":"2022-12-10T23:00:00","date_gmt":"2022-12-10T20:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoin-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k\/"},"modified":"2022-12-10T23:00:00","modified_gmt":"2022-12-10T20:00:00","slug":"bitcoin-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoin-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k\/","title":{"rendered":"# Bitcoin price liquidation risk increases as BTC struggles to reclaim $18K"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 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-6a240a61a0e9a\" 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-6a240a61a0e9a\" 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-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k\/#%E2%80%9D_Bitcoin_price_liquidation_risk_increases_as_BTC_struggles_to_reclaim_18K_%E2%80%9C\" >&#8221; Bitcoin price liquidation risk increases as BTC struggles to reclaim $18K  &#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-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k\/#Bitcoin_margin_longs_faced_a_drastic_increase\" >Bitcoin margin longs faced a drastic increase<\/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-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k\/#Option_traders_remain_risk-averse\" >Option traders remain risk-averse<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoin_price_liquidation_risk_increases_as_BTC_struggles_to_reclaim_18K_%E2%80%9C\"><\/span>&#8221; Bitcoin price liquidation risk increases as BTC struggles to reclaim $18K  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-30a6cf80>Bitcoin (BTC) price had a mixed reaction on Dec. 9 after the November report on United States producer prices showed a 7.4% increase versus 2021. The data suggested that wholesale costs continued to rise and inflation may last longer than investors had previously believed. Oil prices are also still a focus for investors, with crude WTI hitting a new yearly low at $71.10 on Dec. 8.\u00a0<\/p>\n<p>The United States Dollar Index (DXY), a measure of the dollar\u2019s strength against a basket of top foreign currencies, sustained the 104.50 level, but the index traded at 104.10, a 5-month low on Dec. 4. This signals low confidence in the U.S. Federal Reserve\u2019s ability to curb inflation without causing a significant recession.<\/p>\n<p>Trader gutsareon noted that the choppy activity caused leverage longs and shorts to be liquidated, but it was followed by a failed tentative dump below $17,050.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/BTC?src=hash&amp;ref_src=twsrc%5Etfw\">#BTC<\/a> <\/p>\n<p>good study case<\/p>\n<p>first late shorts got taken out on the push..then late longs on the flush&#8230;then longs again on the PPI number&#8230;then shorts again&#8230;then a &#8220;unusual&#8221; low with little to no change in OI <\/p>\n<p>rollercoaster <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/Qju1eOuNMX\">pic.twitter.com\/Qju1eOuNMX<\/a><\/p>\n<p>\u2014 Peter (@gutsareon) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/gutsareon\/status\/1601253006431125504?ref_src=twsrc%5Etfw\">December 9, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>According to the analysis, the open interest stagnation on futures contracts indicated low confidence from bears.<\/p>\n<p>Regulatory uncertainty could have played a key role in limiting Bitcoin&#8217;s upside. On Dec. 8, the United States Securities and Exchange Commission (SEC) issued new guidance that could see publicly traded companies disclose their exposure to crypto assets.<\/p>\n<p>The SEC\u2019s Division of Corporation Finance said that the recent crisis in the crypto asset industry has \u201ccaused widespread disruption\u201d and that U.S. companies might have disclosure obligations under federal securities laws to disclose whether these events could impact their business.<\/p>\n<p>Let\u2019s look at derivatives metrics to understand better how professional traders are positioned in the current market conditions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_margin_longs_faced_a_drastic_increase\"><\/span>Bitcoin margin longs faced a drastic increase<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Margin markets provide insight into how professional traders are positioned because it allows investors to borrow cryptocurrency to leverage their positions.<\/p>\n<p>For example, one can increase exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. Unlike futures contracts, the balance between margin longs and shorts isn\u2019t always matched.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-12\/63ab43e1-65d7-4026-bcdc-ace7c26d54d9.png\"><figcaption style=\"text-align: center;\"><em>OKX stablecoin\/BTC margin lending ratio. Source: OKX<\/em><\/figcaption><\/figure>\n<p>The above chart shows that OKX traders\u2019 margin lending ratio increased from Dec. 4 to Dec. 9, signaling that professional traders increased their leverage longs even after multiple failed attempts to break above the $17,300 resistance.<\/p>\n<p>Currently at 35, the metric favors stablecoin borrowing by a wide margin and indicates that shorts are not confident about building bearish leveraged positions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Option_traders_remain_risk-averse\"><\/span>Option traders remain risk-averse<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Traders should analyze options markets to understand whether Bitcoin will eventually succumb to the bearish <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>flow. The 25% delta skew is a telling sign whenever arbitrage desks and market makers are overcharging for upside or downside protection.<\/p>\n<p>The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.<\/p>\n<p>In short, the skew metric will move above 10% if traders fear a Bitcoin price crash. 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.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-12\/8246660f-e318-48eb-82ed-a040e9596081.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 60-day options 25% delta skew: Source: Laevitas<\/em><\/figcaption><\/figure>\n<p>As displayed above, the 25% delta skew improved between Dec. 4 and Dec. 9, shows options traders reduced their risk aversion for unexpected price dumps. However, at the current 15%, the delta skew signals that investors remain fearful because market makers are less included in offering downside protection.<\/p>\n<p><strong><em>Related:<\/em> <\/strong><strong><em>US regulator seeks feedback on DeFi\u2019s impact on financial crime \u2014 Finance Redefined<\/em><\/strong><\/p>\n<p>From one side, the lack of open interest increase as Bitcoin tested the intraday low on Dec. 9 seems encouraging. Still, excessive use of margin indicates that buyers might be forced to reduce their positions during surprise downside moves.<\/p>\n<p>The longer it takes for Bitcoin to recapture $18,000, the riskier it becomes for leverage margin longs. Traditional markets continue to play an essential role in setting the trend, so a potential retest down to $16,000 cannot be ruled out.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p class=\"post-content__disclaimer\">The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/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 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\/bitcoin-price-liquidation-risk-increases-as-btc-struggles-to-reclaim-18k\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin price liquidation risk increases as BTC struggles to reclaim $18K &#8220; Bitcoin (BTC) price had a mixed reaction on Dec. 9 after the November report on United States producer prices showed a 7.4% increase versus 2021. The data suggested that wholesale costs continued to rise and inflation may last longer than investors had&#8230;<\/p>\n","protected":false},"author":1,"featured_media":524761,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2022-12\/f90519ad-99ee-4d6b-b094-4fec25e0a13d.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81209,74937,74858,74863,75012,74939,132424,74898,70550,3123,73785],"class_list":["post-524760","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-derivatives","tag-market-analysis","tag-okx","tag-sec","tag-federal-reserve","tag-leverage","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/524760","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=524760"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/524760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/524761"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=524760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=524760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=524760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}