Investors are magnetically attracted by the $ 1.1 billion Bitcoin and Ether options that are slated for Friday, June 26.However, some relevant indicators may be missing from futures contracts.
June 26 will also be the last trading day for many weekly and monthly Bitcoin (BTC) futures totaled $ 665 million at press time.
For futures participants, the long-term (buyer) and short-term (seller) positions are always balanced. Therefore, no price effects can be derived. Yet, Some more nuanced indicators give telltale signs of a mood to professional traders.
The increase from $ 300 to $ 9,700 on June 22 could have been a small indicator of the next trendThe same applies to the premium for long-term futures contracts. This is measured by comparing the price of the July contract with that of June, the one-month premium and the three-month premium in September with that of June.
Some exchanges provide additional dataeither by analyzing the positions of the main traders or by consolidating the customer’s net exposure in swaps, futures and spot positions. Both Binance and OKEx currently have similar bullish data, indicating that professional traders are bullish.
Aggregated open positions from BTC futures contracts. Source: Skew
The graphic above shows the open positions for all future contracts, including permanent contracts. OKEx is the largest contributor at $ 900 million, while the Chicago Mercantile Exchange (CME) currently manages $ 450 million.
The premium for long-term futures contracts
Annualized premium for 3-month BTC futures. Source: Skew
Earlier skew data show this The premium for three-month futures contracts has risen steadily in recent months. This market situation is known as contango and has undoubtedly been a bullish indicator since then Sellers are demanding more money to postpone billing.
This is exactly the opposite of what happened in mid-April.When Bitcoin failed to break the $ 7,500 resistance level and fell back to the $ 6,800 level, resulting in a temporary bearish sentiment.
Not even that May 10 fall to the $ 8,100 that settled $ 200 million in Bitcoin caused so much chaos on this indicator.
The average price of open interest
There are currently USD 665 million futures contracts that expire this Friday.. This does not include perpetual and quarterly contracts due in September, so the difference to Skews is a total of $ 4 billion in open positions.
The Chicago Mercantile Exchange (CME) is the leader in analyzing maturity on Friday at just $ 216 million. Note that this regulated exchange has a much greater degree of transparency, making it less likely to inflate numbers than most cryptocurrency derivatives exchanges.
CME Bitcoin Futures Open Interest. Source: Skew
Based on the graphic above, CME’s open interest was established in April and early MayWhile the average price during this period is $ 8,300. Most buyers feel comfortable at the $ 9,400 level and may use these gains to further support prices.
CME Bitcoin futures. Source: TradingView
The net share of clients in long-term and short-term positions
Some exchanges provide useful information about net customer riskeither by measuring the positions of the main customers or by consolidating data from the spot and derivatives markets.
Main dealer net positions. Source: Binance
Binance shows the information of the last 30 days of the main customers in long and short positions and shows an increase in this index. This indicates that Binance’s most active futures contract accounts are 15% net long long, a bullish indicator.
Long and short term net positions from traders. Source: OKEx
OKEx offers a slightly different data set that consolidates the exposure of derivatives and spot markets.. Although this index has a similar trend to Binance, the long-term and short-term ratio recovered from 0.85 to the current value of 1.08, indicating an 8% net exposure that favors long-term positions.
Additional factors to consider
The market does not consist solely of futures with fixed settlement dates, but the opposite occurs. Most open positions are based on open-ended contracts, also called swaps. Part of the $ 665 million open positions on Friday will also be carried over to long-term or open-ended contracts.
While it is impossible to accurately measure the net exposure of professional traders to maturity using the Contango indicators, The average open interest price and the net exposure of large retailers point in the same direction.
There is still time for a change in market sentiment, but one can be sure of that Most professional traders will position themselves for neutral to positive price movements in the coming days.
Pay attention to the schedule
OKEx and Huobi weekly contracts expire on June 26 at 8:00 a.m. (UTC). Bitmex’s quarterly June contracts also end at 8:00 a.m. (UTC), and CME futures expire on June 26 at 3:00 p.m. (UTC).
The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every investment and trade movement involves risks. You have to do your own research when making a decision.