Market data from Aslant show that Investors in the Bitcoin (BTC) options market are cautious bearish in the short term As of September 8th. The mood change takes place after steep drop of 17% for BTC in seven days.
Bitcoin daily chart. Source: TradingView.com
Why could the market data for Bitcoin options be more relevant this time around?
Through the recent setbacks At BitMEX, long deals over $ 50 million have rarely been achieved.
When the price of Bitcoin falls between 5% and 15%, BitMEX typically sees liquidations in excess of $ 80 million to $ 100 million.
The mediocre settlements on the most important futures exchanges are due to relatively few open positions. The term open interest refers to the total number of open short-term and long-term contracts at any given time.
Futures market data shows that most of the selling pressure was not caused by cascading sell-offs. Dear, The miners or whales benefiting from their stocks likely triggered the sharp retreat since early September.
Option dates could become more relevant in the short term as the futures market has stalled.
Traders in the cryptocurrency market generally use two types of derivatives to trade Bitcoin: options and futures.
Total Open Interest of Bitcoin Options. Source: Skew
While overall open interest in Bitcoin futures has decreased, Open interest in options began to recover from August 28th. Skew researcher they write::
“Bitcoin option flows show: short-term bearish, medium-term neutral, long-term bullish. A fair representation of the consensus? “”
Where traders expect BTC in the short term
Short term, Traders are exploring three main areas: Bitcoin whale buy orders at $ 8,800, the CME gap at $ 9,650, and the CME gap at $ 10,620. Edward Morra, a cryptocurrency trader, explained::
“The CME chart has a new gap of $ 10,620. Typically, most of the loopholes (~ 90%) will be closed within a few days, with the exception (10%) which take a long time (e.g. your $ 9 loophole July 6). So it makes sense to assume that the highest gap at 10620 will be filled here first, and then we’ll see how to do it. “
When BTC sees a relief rally, could reach both CME gapsreach the highest gap first. But a dealer known as “Byzantine General” say what There may not be enough shorts to apply pressure. He said::
“People always talk about a ‘squeeze.” But OI fell like a rock and funding is the bottom line. What shorts are there to tighten?
Bitcoin’s open interest in major futures exchanges. Source: Coinalyze.net
The open interest of the declining Bitcoin futures market and the repeated test of $ 10,000 support the short-term bearish fall for BTC. It remains to be seen if he sees a relief rally in 23 days after falling 20%.