Bitcoin traders pile into futures, is a recovery on the way?

The key takeaways

• Bitcoin Futures Demand continues to rise despite recent price weaknesses, showing sustained trader involvement.

• Put options continued to be more expensive than calls due to the persistently bearish attitude among investors.

BitcoinBTCThe price of a (USD) dropped to $109,000 on Monday. This was its lowest value in six weeks. This correction was a result of an $11 billion sale By a five-year dormant whaling that was dormant in the past 5 years. Proceeds are rotated to Ether.ETHSpot and Futures trading on the decentralized Hyperliquid exchange

Demand for Bitcoin futures has surged, despite the recent price drop. Traders are now asking if the next logical move is to increase the Bitcoin value to $120,000.

Bitcoin futures Open interest reached a record high of BTC 752,700 on Monday. This is an increase of 13% compared to two weeks ago. Demand for leveraged trades is higher, which shows traders don’t abandon the market even though Bitcoin has dropped 10% from its August 14 high.

The $85 billion of futures open interests is positive, but it does not reflect optimism because longs and shorts are always equal. A dip below $110,000 may trigger a sell-off if bulls rely too much on leverage. cascading liquidations.

Bitcoin futures are currently trading at an 8% premium, which is up from the 6% of last week. It is noteworthy that the indicator hasn’t stayed above the neutral 10% threshold in more than six month, which means even the record high of $124.176 failed to elicit widespread bullishness.

A Leverage Restructuring that highlights Liquidity, but also raises some suspicion

CoinGlass’ data shows that the sudden decline in Bitcoin caused traders to liquidate their long positions for $284,000,000. Even on the weekend, Bitcoin maintained a high level of liquidity. However, the rapid execution created suspicion due to the fact that the seller held the long position for many years.

Following a temporary upswing, the Bitcoin permanent futures funding rates dropped to 11%. The funding rate in neutral markets usually falls between 8% and 12%. A portion of this tepid sentiment is explained by the $1.2 billion worth of net outflows in US-listed companies. spot Bitcoin ETFs From Aug. 15, 2018 to August 22, 2018.

BTC Option Market to determine whether traders are concerned about this level of caution.

Put options (sell them) are trading for a premium of 10% over the call instruments (buy them), a sign that bearish sentiment is in full swing. It is normal to feel excessive anxiety after a drop of $6,050 in the Bitcoin price within two days. The market psychology was likely influenced when whales switched from Bitcoin exposure to Ether. However, such flows usually stabilize with time.

Related: Strategy buys $357M in Bitcoin as price drops to $112K

The prospect of Bitcoin reaching $120,000 is not dead, despite recent volatility. As global growth is uncertain, sustained gains will likely depend on increased spot ETF investments. As of now, $13.8 billion monthly options expiry On Friday, investors could decide to reenter the stock market.

The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. These are solely the opinions, views and thoughts of the author and may not reflect the opinions and views of Cointelegraph.