Bitcoin (BTC) shows toughness above $ 50,000 on March 25. Despite this, there has been a 10% decrease in the last 24 hours Tesla allows customers to purchase vehicles using BTC except for CEO Elon Musk, who confirms that it will not be converted into Fiat currency.
This was stated on March 22 by the chairman of the US Federal Reserve, Jerome Powell Bitcoin was too volatile, “leaning against nothing” and another asset for speculation. Interestingly, on the same day, BTC lost $ 56,000 in support.
Traders fear that the pump may have been driven by innovation, with a downward trend prevailing. While possible, derivative indicators are not bearish, and any decent correction is likely to hit strong support at $ 50,000.
Part of the uncertainty that investors could derive from a record option period of $ 6.1 billion March 26. However, 84% of the neutral to bear option is already considered worthless because the price of BTC has flown above $ 50,000.
In addition, CME holds $ 980 million in futures contracts that expire on the same day. Although buyers (longs) and sellers (shorts) are in all circumstances paired, some traders fear that BTC prices could be under pressure from futures traders who want to turn their positions upside down by April and May.
Unlike perpetual futures, these CME contracts with a fixed calendar have an expiration date. To maintain a long position, you must buy futures for April or May and sell the March contract at the same time.
In order to better assess the impact of whales and arbitrage counters on the market, derivatives indicators need to be closely monitored.
The futures premium remains bullish
By measuring the difference in costs between futures and the regular spot market, a trader can measure the level of bullish development in the market.
Three-month futures usually trade 10% to 20% on regular spot exchanges to justify locking in funds instead of paying out immediately. Whenever this indicator fades or turns negative, known as “backwardation”, it means that the market is bearish.
The graph above shows that the indicator recently reached 17% on 25 March, while the BTC tested $ 50,000 support. This is extremely upward, as it signals that buyers have remained optimistic and did not want to reduce their positions.
Whenever the base reaches 35% or higher, it means that buyers are extremely used, but this is clearly not the case at the moment.
The bevel is neutral from 19 January
When analyzing options, 25% delta skew is the most relevant measure. This indicator compares similar call (buy) and put (sell) options side by side. Some analysts point to a put-to-call ratio, but this metric does not rule out worthless options, such as the right to sell BTC for $ 45,000.
Delta delicacy therefore offers a less polluted number and will be negative when the put option premium is higher than similar risk call options. Such a positive skew is reflected in higher costs of protection against negative influences, which suggests optimism.
The opposite is true when market makers are bearish, causing the 25% delta skew to gain a positive position.
Over the past five weeks, the bias indicator has remained unchanged, indicating no optimism or pessimism from whales and options market makers. The deviation indicator between negative 10 and positive 10 is considered neutral, which means a balanced risk assessment.
Retailers are not the basis of high futures
As futures and options provide mixed sentiment, the level of continued futures financing should also be monitored. Such a fee is charged every eight hours to ensure that derivatives exchanges do not contain any risk imbalances. Wherever it turns positive, it means that buyers (longs) are those who pay the cost of transmission for greater use of leverage.
The current average of 0.04% is relatively neutral, which corresponds to 0.8% per week. Although such fees face long, it is far from considered expensive. Such data suggest that retailers do not create an arbitrage opportunity that would cause fixed calendar futures to trade at a premium.
Derivatives indicators are generally healthy, with BTC down 16% from a record high of $ 61,800 on March 13. Such data leaves room for further shopping activity, so merchants should not consider the current as unusual.
The views and opinions expressed herein are those of an opinion author and does not necessarily reflect the views of the Cointelegraph. Every investment and business move involves risk. You should do your own research when making your decision.