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

Takeaways from the conference:

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

• Investors’ persistent pessimism was reflected in the premium paid for put options.

BitcoinBTC() fell to its lowest price in over six weeks on Monday. It was the result of an $11 billion sale By a five-year-old dormant whaling that was dormant in the past 5 years. Proceeds are rotated to Ether.ETHSpot and Futures trading on the decentralized Hyperliquid exchange

The demand for Bitcoin Futures has reached an all-time record high despite the decline in price. This led traders to wonder if $120,000 was the next logical move.

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. This stronger demand shows that traders have not abandoned the market, despite Bitcoin falling 10% since its all-time peak on August 14.

The $85 billion of futures open interests is positive, but it does not reflect optimism because longs and shorts are always equal. Bulls who rely on leverage too much could be triggered by a drop below $110,000. cascading liquidations.

Bitcoin futures are currently trading at an 8% neutral premium, which is up from 6% in the prior week. The metric is notable for not having remained over the neutral 10% threshold in more than six month, which means that even the all-time $124,176 high did little to inspire widespread bullishness.

The Leverage Shakeout Highlights Liquidity but Sparks Suspicion

According to CoinGlass, the recent drop blindsided traders who were overleveraged, resulting in $284 millions of liquidation for long positions. Even on the weekend, Bitcoin maintained a high level of liquidity. However, the rapid execution raised questions, as the seller held the long position for many years.

After a brief uptick, the Bitcoin perpetual futures financing rate has dropped to just 11%. The rate is usually between 8% to 12% in neutral markets. The $1.2 billion net outflows of US listed companies can explain some of the muted mood. 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.

Currently, put (sell) option prices are 10% higher than call (buy), indicating a bearish mood. 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

Despite recent sentimental deterioration, there is still a chance that Bitcoin will rally to $120,000. Any sustained rise in price will depend on new spot ETF flows, particularly as the global economy remains uncertain. The $13.8 billion is enough for now monthly options expiry On Friday, investors could decide to reenter the stock market.

This is a general article and not meant to provide investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.