With BTC breaking through USD 55,000, CME Bitcoin derivatives traders have “paper hands” — report

Bitcoin (Bitcoin) Derivatives traders at the Chicago Mercantile Exchange (CME) missed incredible profits because BTC Spot price fell below $55,000 this week.

Data shows that retail investors reduced their long exposure in the Bitcoin futures and options market at the end of September shared Through econometrics. The number of open positions also climbed, indicating that derivatives traders expect the price of Bitcoin to fall, as shown in the chart below.

CME Bitcoin Derivatives-Retail Trader. Source: CFTC “Trader Commitment” report, Ecoinometrics

The data was taken on September 28, when the price of Coinbase’s BTC had fallen below US$41,000—a drop of nearly 23% from its highest point so far this month at US$52,950.Surfaced after falling China decides to ban various crypto transactions.

Ecoinometrics analyst Nick said: “This decline is likely due to traders not extending their long positions to the October contract, and when BTC looked to fall below $40,000 last week, some traders simply closed their positions. “

“In any case, the overall situation is that futures traders lack confidence.”

“This is Paper Hand 101,” the analyst pointed out.

Smart money

Institutional investors in the CME Bitcoin futures market Also follow retail sentiment Because they reduce their long-term exposure in the market. But, on the other hand, their short positions have climbed.

CME Bitcoin derivatives-smart money. Source: CFTC “Trader Commitment” report, Ecoinometrics

As CME options traders are convinced that the price of Bitcoin will fall, the number of put options-implicit put bets on the price of Bitcoin-turns out to be almost twice the potential increase in the price of calls or bets on Bitcoin.

CME Bitcoin options — put and call options on open positions.Source: Econometrics

Trader’s position allocation earned $40,000 The most popular execution price target.

On the other hand, some option traders are betting that the spot price of Bitcoin will reach $60,000 by the end of October. In addition, analyst Crypto Hedger emphasized that the Bitcoin options expiring on November 26 indicate that the sentiment of the bulls is biased towards the execution target of $80,000.

The volume of buying/selling of Bitcoin options contracts in the past 24 hours on November 26.Source: Laevitas, crypto hedge

Konstantin Anissimov, Executive Director of CEX.IO, said: “At the current growth rate, Bitcoin has formed a very strong support at the price point of $50,000. Short-term traders may also need to pay attention to 56,000. Key resistance levels near the dollar,” add:

“Below or above these levels may trigger another catastrophic price reversal or a sharp rise to $60,000 in the fourth quarter.”

Bitcoin supply tightening

Ecoinometrics shared on-chain data is also displayed Higher level Bitcoin withdrawals From all cryptocurrency exchanges.

In detail, Bitcoin’s 30-day net transaction flow has been rising since July 2020. As shown in the color-coded chart below, blue and red indicate extreme outflows and inflows, respectively.

Bitcoin rolling net exchange traffic. Source: Coinmetrics

Econometrics points out that the number of bitcoins leaving the exchange is currently higher than in the previous four years Halving cycle.

Bitcoin rolling net transaction inflows (the second halving and the third). Source: Coinmetrics

At the same time, traders saw that the supply of Bitcoin on exchanges decreased, Increase “holding” activities, As a further catalyst for the liquidity crisis and more price increases.

related: Bitcoin’s “blockbuster breakthrough” fractal indicates that the price of BTC may reach US$250,000 to US$350,000 in 2021

“There did exist periods of net outflows, but in terms of scale, they seem to be much smaller than where we are now,” Ecoinometrics emphasized, adding:

“This is another sign that we are facing a liquidity crisis, which may make Bitcoin’s value much higher than it is now.”

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