Fun

Bitcoin derivatives metrics suggest $70K is here to stay

News Feed - 2024-04-12 05:04:46

Marcel Pechman3 hours agoBitcoin derivatives metrics suggest $70K is here to stayReduced leverage use in Bitcoin futures greatly reduces the odds of cascading liquidations in the case of a BTC price pullback.1438 Total views5 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksSince March 25, Bitcoin (BTC) has struggled to maintain its value above the $71,000 mark, a trend that some may view as a sign of bearish momentum. Nevertheless, insights from the BTC derivatives market reveal a more stable environment, as the previous atmosphere of rampant optimism has notably subsided.Resilient U.S. inflation strengthens the bull case for Bitcoin


Currently, Bitcoin finds it challenging to hold its ground above the $70,000 threshold. Yet, certain analysts believe that the recent U.S. inflation figures—showing unexpected resilience—and the unsustainable U.S. government fiscal trajectory create an ideal backdrop for investing in scarce assets.Source:MatticusBTC


Market analyst MatticusBTC attributes the inflation surge to the significant monetary expansion orchestrated by the U.S. Federal Reserve during the 2020-2021 period. As a result, the Federal Reserve may have no choice but to maintain elevated interest rates. However, this strategy has its limitations, especially considering the interest burden of U.S. government debt.


Higher interest rates pose problems for businesses and households, especially when they have to refinance or get new loans. This situation usually reduces investors’ appetite for risk-on assets because it slows down economic growth. However, in 2024, investors started looking for alternatives to put their money apart from the U.S. Treasury bonds.


In the past 30 days, both gold and Bitcoin have soared to all-time highs, while the U.S. government 2-year notes dropped to a nine-month low on April 9. This movement suggests a lack of investor appetite for a 4.7% fixed-income yield as a hedge against inflation.The stock market might dictate Bitcoin’s performance in the near term


Bitcoin critics suggest that the recent drop in the S&P 500 index from its all-time high of 5,265 on March 28 may signal an upcoming economic downturn. Given the strong correlation between Bitcoin and the stock market, which has been over 80% in the past month, Bitcoin"s price might initially fall if stock market issues continue.S&P 500 futures and Bitcoin/USD index 40-day correlation. Source: TradingView


Despite facing resistance at the $72,000 level, the BTC futures and options markets are currently displaying a level of neutrality. This stability is underscored by two critical indicators, highlighting a healthier demand for leverage compared to the situation at the end of March. The concern over excessive leverage is valid, especially with the open interest in BTC futures at $34.3 billion.


Perpetual contracts, also known as inverse swaps, incorporate a rate that is recalculated every eight hours. A positive funding rate signals increased demand for bullish positions.Bitcoin perpetual futures 8-hour funding rate. Source: Coinglass


Data reveals a notable funding rate peak at 0.07% per eight-hour period on March 31, equating to an annualized rate of 1.5% per week. However, this indicator has adjusted, with the current rate at 0.3% weekly. This reduced pressure on traders using leverage for long positions signals a more equitable market dynamic and lays the groundwork for potential bullish momentum.


To confirm whether the decreased demand for leveraged long positions accurately reflects market sentiment, one should analyze the balance between call (buy) and put (sell) options demand. An increase in put option activity often reflects a market leaning toward a neutral or bearish outlook.


Related:Bitcoin bounces back as Grayscale ETF outflows hit new record lowDeribit BTC options put-to-call volume ratio. Source: Laevitas


Data from the past few weeks shows that put options have consistently been outpaced by call options, with a significant 35% average volume disparity. This indicates a lower demand for protection against a price decline, an intriguing trend considering Bitcoin’s multiple tests of the $64,500 support level in early April.


While there"s no certainty that Bitcoin will surge past its all-time highs in the near future, the threat of a major sell-off triggered by excessive leverage appears to have subsided. So, unless there"s a major drop in overall economic conditions, it seems unlikely that Bitcoin will fall below $65,000.


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Cryptocurrencies# Funding# Bitcoin Price# Markets# Derivatives# Inflation# Leverage# National Debt# Futures# Market AnalysisAdd reaction

News Feed

Biggest Movers: Near, EOS and RUNE Fall During Friday’s Selloff
Biggest Movers: Near, EOS and RUNE Fall During Friday"s Selloff NEAR was one of the big movers in today’s trading session, as prices fell by almost 10% on Friday. RUNE and E
Anti-crypto SEC commissioner’s term is up in 41 days — Will she be replaced?
Turner Wright1 hour agoAnti-crypto SEC commissioner’s term is up in 41 days — Will she be replaced?Caroline Crenshaw may continue to serve at the SEC for an additional 18 months after her term ends in June if the Whi
Biggest Movers: CAKE Hits $10, as DOGE Rises for a Second Consecutive Session
Biggest Movers: CAKE Hits $10, as DOGE Rises for a Second Consecutive Session DOGE was once again higher on Monday, as traders bought the token, days after a video about the meme-
Crypto wallet Exodus donates $1.3M to help ‘mobilize’ US crypto voters
Martin Young12 hours agoCrypto wallet Exodus donates $1.3M to help ‘mobilize’ US crypto votersExodus’ donation to a political action committee is to “help support their mission of educating and mobilizing crypto
Ezra Reguerra25 minutes agoDeFi borrower uses luxury watch-backed NFT as collateral for a loanWhile some praised the move, others believe that it’s centralized and is adding NFTs where it’s not necessary.315 Total vi
Biggest Movers: DOGE, ADA Nearly 10% Higher, as AXS Leads Today’s Gainers
Biggest Movers: DOGE, ADA Nearly 10% Higher, as AXS Leads Today"s Gainers DOGE was higher during today’s session, as it was reported that a Bitcoin ATM operator added the to
US Senator Calls on SEC Chairman to Provide Regulatory Clarity on Cryptocurrencies
US Senator Calls on SEC Chairman to Provide Regulatory Clarity on Cryptocurrencies A U.S. senator has asked the chairman of the U.S. Securities and Exchange Commission (SEC), Gary
BTC to INR: P2P Bitcoin Marketplaces Growing in India
BTC to INR: P2P Bitcoin Marketplaces Growing in IndiaEver since the supreme court quashed the banking restriction imposed by the central bank, interest in cryptocurrency has been ri
Bitcoin Won’t Hit $400,000 This Cycle, VanEck CEO Reveals Realistic Price Target
Este artículo también está disponible en español. In an interview with Mario Nawfal, Jan van Eck, CEO of $118 billion global asset manager VanEck, offered an analysis of
EU crypto AML authority to establish HQ in Frankfurt
David Attlee14 hours agoEU crypto AML authority to establish HQ in FrankfurtThe Anti-Money Laundering Authority will start its work by mid-2025.5151 Total views7 Total sharesListen to article 0:00NewsOwn this piece of cr
Bitcoin Target Locked: Metaplanet Eyes 10,000 BTC This Year
Este artículo también está disponible en español. Metaplanet ushers in the new year with a bullish sentiment on Bitcoin and blockchain technology.
Alium Finance Introducing Hybrid DEX Liquidity to Address Liquidity Limitations, Trade Your Favorite Crypto With Unlimited Liquidity
Alium Finance Introducing Hybrid DEX Liquidity to Address Liquidity Limitations, Trade Your Favorite Crypto With Unlimited Liquidity press release PRESS RELEASE. Using the latest De