Bitcoin derivatives indicators reflect the neutral sentiment of traders, but anything can happen

Bitcoin’s (BTC) the last daily close above $45,000 was 66 days ago, but more importantly, the current $39,300 level was first seen on January 7, 2021. 13 months of boom and bust cycles The asset peaked with BTC price hitting $69,000 on November 10, 2021.

It all starts with VanEck Spot Bitcoin Exchange Traded Fund was rejected by the U.S. Securities and Exchange Commission (SEC) on November 12, 2020. While the decision was largely expected, the regulator was stern and direct about its rationale in favor of the move. refuse.

Curiously, almost a year later, on November 10, 2021, the crypto market rebounded to its all-time high market cap at $3.11 trillion in line with inflation. of the United States is measured in CPI reached 6.2%, the highest level in 30 years.

Inflation also has negative consequences for risk markets, as the US Federal Reserve admitted on November 30, 2021, that inflation is not just a “transient” problem, and implying that descending may occur sooner than expected.

More recently, on March 10, US Senate passes $1.5 trillion package, is currently awaiting the signature of President Joe Biden. The new money is the first budget increase since former President Donald Trump left office.

The data shows that professional traders are not willing to hold leveraged long-terms

To understand the positions of professional traders, including whales and market makers, see Bitcoin futures and options market data. The underlying indicator measures the difference between a longer-term futures contract and the current spot market level.

Bitcoin futures annual premiums will range from 5% to 12% to compensate traders for “locking in” funds for two to three months until the contract expires. Levels below 5% are extremely bearish, while numbers above 12% indicate an uptrend.

Annual premium for 3-month Bitcoin futures contract. Source:

The chart above shows that the index fell below 5% on February 11 and there is no sign of confidence from professional traders yet.

However, one would not be wrong to judge that a break of the $44,500 resistance would eventually catch investors off guard, creating strong buying activity to buy short positions.

Options traders worry less about downside risk even more

Currently, Bitcoin looks rather undecided at close to $40,000, which makes it difficult to determine the direction of the market. A 25% delta deviation is an indication that whenever the arbitrage desk and market makers charge too much for bullish or bearish protection.

If those traders fear a drop in Bitcoin’s price, the skew indicator will move above 10%. On the other hand, overall excitement reflects a negative bias of 10%. That is why this indicator is called the fear and greed gauge of professional traders.

30-day Bitcoin options on 25% delta skew: Source:

As shown above, from February 28 to March 8, the tilt indicator fluctuated between 7% and 11%. While not exactly signaling fear, these options traders overcharged for bearish protection by a wide margin.

Related: Bitcoin spikes above $40k as Russia notices ‘positive changes’ in Ukraine war dialogue

The past three days show a significant improvement and now the delta deviation of 4% indicates a more balanced situation. From a BTC options market perspective, there is a similar risk to unexpected price movements up and down.

The mixed data from Bitcoin derivatives present an interesting opportunity for the bulls. Cheap futures premiums offer a long leveraged opportunity at a relatively low cost, and downside protection is at a thirty-day low.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.