Skew’s market data shows that investors in the Bitcoin options market (BTC) are cautiously bearish in the short term from September 8. The change in sentiment comes after BTC’s sharp 17% drop in seven days.
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The daily chart of Bitcoin
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Why could the Bitcoin Options Market data be more relevant this time?
Throughout recent setbacks, BitMEX rarely saw settlements of long contracts above $50 million.
Typically, when the Bitcoin price falls between 5% and 15%, BitMEX tends to see settlements above $80 to $100 million.
The mediocre settlements on the major futures exchanges come from relatively low open interest. The term open interest refers to the total number of short and long term contracts open at any given time.
Futures market data indicates that the majority of selling pressure did not come from cascading settlements. Rather, miners or whales making profits from their holdings probably triggered the sharp decline since early September.
Options data could become more relevant in the short term because the futures market has stagnated.
Traders in the crypto market generally use two types of derivatives to trade Bitcoin: options and futures.
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While the aggregate open interest of Bitcoin Loophole futures has been falling, the open interest of options began to recover as of August 28. Skew researchers wrote:
„Bitcoin option flows show: short-term bearish, medium-term neutral, long-term bullish. A fair representation of the consensus?