Bitcoin price indexes show that the bulls are not affected by the liquidation of $ 1.6 billion

Bitcoin’s sudden move of $ 11,500 caused the liquidation of more than $ 1.64 billion of BTC futures. This whopping 8.5% of the total $ 19.5 billion open contract (OI), coincidentally has just hit an all-time high.

While these are important numbers, they are proportionally lower than the $ 1 billion futures contract liquidation on November 26, 2020. At the time, a 16% correction after Bitcoin’s price tested a low of $ 16,300 resulted in a 17% drop in OI.

Before yesterday’s big price move, investors’ positive expectations regarding Bitcoin remained unshaken, as neither the funding rates of futures contracts nor the 25% delta deviation of options contracts were present. warning sign.

OI reduced by 8%

OI Bitcoin Futures | Source: By

As the chart above shows, the fall in BTC futures price and OI did not affect Bitcoin’s long-term growth. Between January 19 and 23, the index fell 20 percent, but it only took two weeks to recover to $ 13 billion.

OI changes stronger when traders use excessive leverage. When this happens, normal price movements will cause mass liquidations, reducing the amount of OI.

Buy-offs kept steady, indicating a healthy market

By measuring the premium of the futures contract against the current spot, it can be inferred whether professional traders are inclined to an up or down trend. Usually, the markets display a slightly positive annual rate, a situation known as a “hold-off compensation”.

Annual Fees of Bitcoin Futures March 26 | Source: NYDIG

Though the spread has decreased after hitting 5.7% on Feb. 17, it has since dropped to 3.5% – on average. Considering that there are 31 days left until the March 26 expiration, which means the annual rate of 50% is hugely increased.

According to previous reports, the funding rate for permanent contracts has exceeded 2.5% per week. As a result, arbitrage tables are likely to pay a hefty spread fee on March contracts to benefit from the spread.

The 25% delta deviation of the options market remains optimistic

A 25% delta deviation measures how neutral to bullish call options are valued against equivalent discount options.

25% delta deviation of 3 month Bitcoin options contract | Source: Laevitas

This indicator acts as a measure of option traders’ fear and greed and it is currently at -6%, meaning that protection on the upside will be more expensive. This further confirms that the top market makers and traders are optimistic.

Major indicators continue to favor the bulls

Yesterday’s price action may surprise new market entrants, but those who remember when Bitcoin’s price dropped $ 11,200 between Jan. 10 and 11 will know that these drastic moves are not possible. considered out of the norm, especially considering Bitcoin’s 6-day volatility at 5.1%.

The data shows that the traders who bought the prices down yesterday are likely to win. Bitcoin’s positive news flow and institutional investors’ increasing interest in BTC will likely only increase after the price retest $ 48,000 yesterday.

JPMorgan Chase Bank noted that Bitcoin may face selling pressure ahead

Many JPMorgan Chase experts have analyzed the current price of Bitcoin when compared to other commodities and noted that the asset may experience selling pressure ahead.

“JPMorgan strategists say they have calculated intrinsic value by treating Bitcoin as a commodity and looking at marginal production costs effectively,” reported India’s BloombergQuint, adding that :

“Bitcoin faces a breeze in the short term based on futures market analysis and estimation of the intrinsic value of cryptocurrencies, according to JPMorgan Chase & Co.”

Bitcoin fell more than 8% last month but held above $ 10,000 and has since risen back to $ 11,000. While the cryptocurrency has had a volatile year, the Bloomberg Galaxy Crypto Index has risen more than 80%, making it one of the best performing asset classes this year.

Bitcoin futures prices usually trade slightly higher or lower than the spot price. Futures prices tend to get closer to the spot price as the contracts are closer to expiration date. Futures prices above the spot price may indicate an uptrend, while prices below the spot price may indicate bearish expectations.

JPMorgan experts have reported that Bitcoin’s bullish positions are more than its bearish positions, according to a futures-based indicator. Strategists also mentioned an increase in buying pressure stemming from the recent trend of financial giants like Paul Tudor Jones, MicroStrategy and Square.

Bitcoin has become famous as a commodity in recent years, with participants often comparing their assets to digital gold. The fact that traditional analysts have begun to see Bitcoin as a commodity may indicate the continuation of the asset’s mainstream trajectory.