The recent fluctuations, in Bitcoins derivatives market have shown that traders hold a ultimately positive outlook. Despite the drop in price on December 11th with Bitcoin BTC 6.56% reaching a low of $40,200 its subsequent 4.2% increase within six hours indicates that the impact of liquidation orders has significantly reduced. This challenges the idea that the crash was solely driven by futures markets.
One important factor to consider when assessing market sentiment is the Bitcoin futures premium, also known as the basis rate. Skilled traders often prefer contracts due to their fixed funding rates. In markets these futures generally trade at a premium between 5% and 10%. The fact that the Bitcoin futures premium remained consistently above the 10% threshold after the price drop on December 11th suggests a positive sentiment in the market.
Furthermore examining the BTC options market provides a nuanced perspective. The 25% delta skew, which measures the balance, between bearish sentiments has remained neutral since December 5th. This equilibrium indicates that both bullish call options and bearish put options have costs.
Although not as positive, as weeks this data shows that there is still resilience despite the 6.1% drop since December 10.
We can gain insights by examining the activity in Bitcoins derivatives market. Bitcoins value has seen an increase approaching the $44,000 mark. This rise is attributed to people getting involved in trading crypto derivatives. Data from CoinGlass reveals a growth in interest for options reaching around $20 billion. This indicates both increased liquidity and greater participation in the market. The fact that 60% of the trading volume consists of call options suggests a bullish sentiment among traders. At the time the presence of put options (40%) indicates an approach towards potential downward movements.
Looking ahead to January 26 2024 we can see a concentration of call options in the options market at the $50,000 strike price. This clustering suggests that traders collectively anticipate Bitcoin surpassing this price level during the months of 2024. Moreover we observe calls, at both the $45,000 and $75,000 strike prices indicating some traders hedging against declines and others predicting price appreciation.