Bitcoin (BTC) sudden drop of $ 11,500 liquidated more than $ 1.64 billion in bitcoin futures. That huge number represents 8.5% of the total open interest of $ 19.5 billion, which also happens to be at its most permanent high.
While these are important numbers, they are relatively lower than the $ 1 billion futures liquidation on November 26, 2020. At that time, the 16% correction that followed the bitcoin price test lowered the low of $ 16,300 and the open interest rate by 17%. . …
In light of today’s massive price increases, positive investor expectations for Bitcoin remain unchanged as the forward funding rate and 25% Delta rejections are not of concern.
The open interest rate decreased 8%
As you can see from the chart above, negative price fluctuations and declines in open interest rates in Bitcoin futures do not affect Bitcoin’s long-term growth. From January 19 to January 23, the number was down 20%, but it took only two weeks to reach the $ 13 billion level.
The open interest will change more aggressively when traders use excessive influence. When this happens, normal price fluctuations lead to successive settlements, reducing the number of open contracts on hold.
Contango remained stable, indicating a healthy market.
By measuring the premium on futures contracts in relation to current spot levels, it can be inferred whether professional traders are leaning in an upward or downward direction. The markets usually show a slightly positive annual interest rate, a situation known as contango.
Although the premium decreased after 5.7% on February 17th, it has since decreased to 3.5%, which is the average. With 31 days left before the contract expires on March 26th, that means a sharp 50% hike in the annual rate.
As Cointelegraph previously reported, the funding rate for permanent contracts exceeds 2.5% per week. Hence, arbitration agencies are likely to pay a huge premium on the March contracts in order to take advantage of the price difference.
Delta’s 25% deviation in the options market remains optimistic
The Delta 25% shows how bullish bearish long options compare to similar bearish conditions.
The indicator acts as a measure of options trader’s fear and greed, and is currently at -6%, which means that protection from rallies is more expensive. This once again confirms the lack of despair among market producers and major traders.
Major indices continue to favor the bulls
Today’s price action may come as a surprise to newcomers, but those who remember when Bitcoin’s price fell by $ 11,200 between January 10 and 11, they will know that these sharp moves are not unusual, especially given Bitcoin’s six-day fluctuation. 5.1%.
The data shows that traders buying today’s low are likely to be at the top. The influx of positive news about Bitcoin and the growing interest from institutional investors in BTC is likely to grow after today’s test of $ 48,000.