Bitcoin price is close to $40,000, but derivatives data is still bullish


The price of Bitcoin (Bitcoin) Since the high of $52,950 on September 7 fell to the low of $42,800 only two hours later, it is facing a period of severe volatility. Recently, despite rigorous testing, the $45,000 support level remained for a few days, which triggered a swing of $3,400 on September 13.

There is no doubt that since the liquidation of the $3.54 billion worth of stocks, shorts—traders who bet on falling prices—have the upper hand. Long (buyer) futures contract September 7.

MicroStrategy announced it on September 13 Added more than 5,050 bitcoins The average price of US$48,099 is not enough to rebuild confidence, and the price of cryptocurrency remains unchanged at around US$44,200.

Although the impact of short positions may be felt, regulatory concerns are more likely to continue to suppress the market. According to reports, the U.S. Treasury Department has discussed potential regulation of private stablecoins because Report Reuters reported on September 10.

As the market value of stablecoins has grown from US$37 billion in January to US$125 billion today, regulators have become increasingly interested.In addition, both Visa and Mastercard Reiterated their interest in stablecoin-related solutions.

Regardless of the reason behind the current price weakness, derivative contracts have been showing bullish sentiment since August 7.

Professional traders have been bullish for the past five weeks

Bitcoin quarterly futures are the tool of choice for whales and arbitrage platforms because they have a significant advantage in the lack of fluctuating financing interest rates. However, due to settlement dates and price differences in the spot market, these seem complicated for retail traders.

When traders choose perpetual contracts (reverse swaps), derivatives exchanges charge a fee every eight hours, depending on which party needs more leverage. At the same time, contracts that expire on a fixed date are usually traded at a premium from regular spot market exchanges to compensate for delayed settlement.

Bitcoin’s three-month futures annualized premium.Source: Lavitas

In a healthy market, the annualized premium is expected to be 5% to 15%, because the funds locked in these contracts could have been used for loan opportunities. This situation is called a futures premium, and it occurs in almost all derivatives.

However, the indicator gradually weakened or became negative during the bearish market, leading to a red flag called “retreat.”

The above chart shows that the premium (basis) rose above 8% on August 7 and has maintained this mildly bullish trend ever since. Therefore, even if Bitcoin tested below the $44,000 level twice in the past 15 days, the data is very healthy, and there is almost no lack of belief.

related: Regulatory and privacy issues lag behind the SEC’s threat to Coinbase

Futures positions remain healthy

The US$3.54 billion clearing of the derivatives market on September 7 will definitely hurt over-leveraged traders, but from the perspective of the macro plan, the open interest of Bitcoin futures is still healthy.

Bitcoin futures aggregate open positions in the U.S. dollar. Source: Bybt

See how the current $14.8 billion figure is 23% higher than the June and July average of $12 billion. This contradicts speculation that traders are severely affected and unwilling to establish positions due to Bitcoin’s volatility or somehow fear of impending bearish events.

There is no doubt that, at least according to the futures market, despite the recent price adjustments, investors are neutral on the bullish outlook. Of course, traders should monitor important resistance levels, but so far, $44,000 has been firm.

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