Bitcoin derivatives markets flipped neutral-to-bearish after China’s ‘crypto ban’ announcement triggered a BTC price dip to $40,600.
China bans Bitcoin (BTC), очередной раз.
Нет, we’re not traveling back in time. В сен. 24, Народный банк Китая (PBoC) published a new set of measures to promote inter-departmental coordination on cracking down on crypto activity. The measures intended to “cut off payment channels, dispose of relevant websites and mobile applications in accordance with the law.”
Most investors may have missed the $3 billion BTC and $1.5 billion Ether (ETH) monthly options expiry that took place less than one hour before the crypto ban news came out. According to “Molly”, a former Bitcoin Magazine contributor, the remarks from China were originally posted on Sept. 3.
тем не мение, if some entity were aiming to profit from the negative price swing, releasing the news ahead of the expiry at 8:00 am UTC on Friday would have made more sense. Например, в $42,000 protective put option became worthless because the Deribit expiry price was $44,873. That option holder had a right to sell Bitcoin at $42,000, but there’s no value in that if BTC expiry happens above that level.
For the conspiracy theorists out there, Чикагская товарная биржа (CME) Bitcoin futures expiry is the average price between 2:00 pm and 3:00 pm UTC. вследствие этого, the potential $340 million open interest settled near the $42,150 уровень. In the futures markets, покупатели (длинные) и продавцы (шорты) are matched at all times, thus making it virtually impossible to guess which side has larger firepower.
Несмотря на $4,000 negative price swing, aggregate liquidations on leveraged long futures contracts were less than $120 миллион. This data should be highly worrisome for bears because it signals that bulls are not overconfident and that they are not using extreme leverage.
Pro traders showed some doubt but remained neutral
To analyze how bullish or bearish professional traders are, one should monitor the futures premium — also known as “basis rate.”
The indicator measures the difference between longer-term futures contracts and the current spot market levels. А 5% к 15% годовая премия ожидается на здоровых рынках, which is a situation known as contango.
This price gap is caused by sellers demanding more money to withhold settlement longer, and a red alert emerges whenever this indicator fades or turns negative, known as “backwardation.”
Notice how the sharp decrease caused by the negative 9% move on Sept. 24 caused the annualized futures premium to reach its lowest level in two months. The current 6% indicator lies at the bottom of the “neutral” range, ending a moderate bullish period that lasted until Sept. 19.
To confirm whether this movement was specific to that instrument, one should also analyze options markets.
Option markets confirm traders are entering the “fear” zone
В 25% delta skew сравнивает аналогичный вызов (купить) и положи (продавать) опции. The metric will turn positive when “fear” is prevalent as the protective put options premium is higher than similar risk call options.
The opposite holds when market makers are bullish, вызывая 25% delta skew indicator to shift to the negative area. Readings between negative 8% и положительный 8% are usually deemed neutral.
В 25% delta skew had been ranging in the neutral zone since July 24, but it spiked to 10% в сентябре. 22, signaling “fear” from options traders. After a brief retest of the neutral 8% уровень, today’s Bitcoin price action has caused the indicator to rise above 11%. Снова, a level last seen two months ago, and very similar to BTC futures markets.
Although no bearish signs emerged from the Bitcoin derivatives market, today’s dip below $41,000 marked professional traders flip to “fear” mode. The result of this is that futures contracts traders are reluctant to open leverage long positions, while option markets display a premium for protective put options.
Unless Bitcoin shows strength during the weekend, bears might profit from investors’ current panic.
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