Bitcoin (BTC) shows that it has over $ 50,000 on March 25th. The 10% decline has occurred in the last 24 hours, despite Tesla allowing customers to buy cars with BTC, and CEO Elon Musk, who has assured them that they will not be converted to fiat currency.
On March 22, US Federal Reserve Chairman Jerome Powell said Bitcoin was extremely volatile, “unsupported” and more than just speculation. Ironically, the same day BTC lost $ 56,000 in support, which was resisted.
Traders are concerned that the pump may be triggered by the news while the downtrend is prevalent. While possible, derivatives are not subject to rejection, and a decent correction is likely to find solid support at the $ 50,000 level.
Some of the uncertainty may have arisen among investors over the standard expiration date of the $ 6.1 billion options on March 26. However, 84% of neutral to bearish put options were effectively considered worthless as the bitcoin price exceeded $ 50,000.
In addition, CME has $ 980 million in futures contracts that expire on the same day. Despite the constant reconciliation of buyers (long positions) and sellers (short positions), some traders are worried that Bitcoin prices may come under pressure from futures traders who want to expand their positions in April and May.
Unlike permanent futures, fixed calendar CMEs have a fixed expiration date. Therefore, to maintain a long position, you need to buy futures contracts from April or May while selling March contracts.
Therefore, to better assess the impact of arbitration agencies and whales on the market, you should pay close attention to the derivative indices.
The future premium is still bullish
By measuring the cost gap between a futures contract and the regular spot market, a trader can determine the level of a trend in the market.
Typically, three-month futures contracts are traded at rates ranging from 10% to 20% over regular spot exchanges to justify blocking funds rather than redeeming them immediately. When this indicator goes out or becomes negative, which is called “reset”, it indicates that the market is bearish.
The chart above shows that the index recently reached 17% on March 25, while BTC tested the $ 50,000 support. This is very optimistic, as it indicates that current buyers remain optimistic and reluctant to cut their positions.
When the base reaches 35% or higher, it indicates maximum influence for buyers, but this is clearly not the case now.
Bias for options has been neutral since 19 January.
When analyzing alternatives, a 25% incline difference is the most appropriate calculation. This indicator compares buy (buy) and sell (sell) options side by side. Some analysts cite the buy-to-buy ratio, but this figure does not rule out useless options such as the right to sell BTC for $ 45,000.
The participation deviation is thus a less dangerous number and will be a negative number when the premium for put options is higher than for corresponding risk calls. This positive bias results in higher protection costs than the disadvantage, which indicates optimism.
The opposite is true when market producers are bearish, which causes the delta deviation index of 25% to be positive.
Over the past five weeks, the deviation indicator has remained stable, indicating a lack of optimism or pessimism on the part of whales and market participants. An index for deviations between negative 10 and 10 is positively neutral, which means a balanced risk assessment.
Traders keep up with high futures contracts
Since futures and options cause mixed sentiment, a constant future financing rate should also be monitored. These fees are charged every eight hours to ensure that there is no risk of imbalance on the derivatives exchange. When it becomes positive, it means that buyers (buyers) pay the shipping costs due to increased use of leverage.