Market data from Skew shows that investors in the Bitcoin Options (BTC) market will fall cautiously in the short term from 8 September. The shift in emotions came after BTC suddenly fell 17% in seven days.
Bitcoin fell below the support level of $ 10,000 for the fourth day in a row. Some analysts believe that reconsideration at the same level is a bearish signal. Others say that BTC shows resilience in an important support area.
Why market data for Bitcoin options may be more relevant this time
In recent recessions, BitMEX has rarely seen sales of long-term contracts in excess of $ 50 million.
Typically, when the price of Bitcoin falls 5-15%, BitMEX tends to see settlements in excess of $ 80-100 million.
The unsatisfactory settlement on the large futures exchanges is attributed to the relatively low open interest rate. The term “open interest” refers to the total amount of short and long contracts opened at any given time.
Data on the futures market show that much of the sales pressure was not caused by the liquidation of the series. Instead, it is likely that mining or whales earning on their property have plummeted since early September.
Option data may become more important in the short term because the futures market is in recession.
Traders in the cryptocurrency market typically use two types of derivatives to trade bitcoin: options and futures.
While overall interest in bitcoin futures has declined, open interest in options has begun to recover since August 28. The skew researchers wrote:
Bitcoin alternative flows show: short-term bearish, medium-term neutral, long-term bullish. Fair presentation of consensus? ”
Traders expect that BTC will soon lead movement
In the short term, traders are exploring three main areas: a buy order of $ 8,800 bitcoin whales, a CME gap of $ 9,650 and a gap of $ 10,620. Edward Moura, a cryptocurrency trader, explained:
There’s a new gap of 10620 on the CME chart, and most of the gaps (~ 90%) are usually filled within a few days at most, with the exception of the time-consuming (10%) exception (like your $ 9.6 gap from July). It makes sense to assume that the higher gap in 10620 is filled first, and then see how things go. ”
If BTC sees an increase in the rally, it can look for CME holes and only now reach a larger gap. But a borrowed merchant known as the Byzantine general says that the shorts may not be enough to put pressure on. He said:
“People are still talking about ‘pressure.’ “But OI has collapsed like a rock, and it is based on economics. What shorts are available for compression?
Open interest in the shrinking bitcoin futures market and repeated reconsideration of $ 10,000 confirm BTC’s short-term bearish stance. It remains to be seen if he will see a comfortable rally after falling 20% in 23 days.