Bitcoin (BTC) did not maintain more than $ 85,000 on March 14 despite an increase of 1.9% of the S & P 500 index. More importantly, it has been a week since Bitcoin was finally $ 90,000, and traders questioned whether the bull market truly ended or whether the sales pressure continued.
The ratio of Bitcoin rebounds at the weak level
In terms of derivatives, Bitcoin Metric showed elasticity despite the decrease of 30% from $ 109,354 on January 20. The ratio of Bitcoin was restored to a healthy level after a brief signal on the weakness on March 13.
Bitcoin 2 -month gift contract annual premium. source: LAevitas.ch
The trader usually requires an annual premium of 5% to 10% annually to compensate for a longer settlement period. The default ratio of less than this threshold is that the demand for leverage buyers is weak. The current 5% ratio is lower than the 8% recorded two weeks ago, but it remains in the neutral area.
The central bank will eventually increase the price of BTC.
Bitcoin price measures suggest that the factors that closely track the S & P 500 to induce investor risk avoidance may not be directly connected to the highest cryptocurrency.
However, this challenges Bitcoin’s ideas as non -correlation assets because the price behavior has been closely linked to the traditional market in the short term.
S & P 500 Future (left) vs. bitcoin/USD. Source: TradingView / COINTELEGRAPH
If the price of Bitcoin depends greatly on the stock market, which is under pressure due to the fear of the economic recession, investors are likely to continue to reduce exposure to risk assets and turn into short -term bonds for safety.
However, the central bank is expected to implement stimulating measures to avoid the recession, and as a result, lack of assets such as Bitcoin can be excellent.
According to the CME Fedwatch tool, the market sets less than 40% for US interest rates below 3.75% at the current 4.25% baseline before the July 30 FOMC meeting.
Nevertheless, Bitcoin should find a $ 90,000 as soon as the S & P 500 sells some of the recent 10% loss. But in the worst scenario, panic sales of dangerous assets can continue.
Under these conditions, the BTC will be especially reduced for the next few months if the Spot Bitcoin Exchange-Traded Fund (ETF) continues to experience important net leaks.
Bitcoin derivatives have no signs of stress
Professional traders currently do not actively use Bitcoin options on heding, as can be seen in 25% DELTA SKEW Metric. This means that there are few people who expect market participants to resume $ 76,900 at any time.
Bitcoin 1 month option 25% Delta Ski (foot call). Source: LAevitas.ch
Optimistic emotions usually put an optional trading (sales) with a discount of 6% or more. In contrast, the weak period is to rise to 6% premium, as you can simply see on March 10 and March 12. However, 25% of Delta Ski recently stayed within a neutral range and reflected the healthy derivative market.
To better measure the trader sentiment, it is important to investigate the BTC margin market. Unlike the derivatives contract, which is always balanced between LONG (buyer) and shorts (sellers), Margin Market allows a trader to buy spot bitcoin by renting Stablecoin. Similarly, weak merchants can rent a BTC to open a short position to bet on the price drop.
Bitcoin margin long -term ratio in OKX. source: OKX
OKX’s bitcoin long -range margin ratio shows shorts more than 18 times. Historically, excessive confidence has been promoted more than 40 times, and the level of less than five times for a long time is considered weak. The current ratio reflects emotions on January 30 when Bitcoin is traded more than $ 100,000.
There is no sign of stress or weakness in the Bitcoin derivatives and margin markets, especially after the long -term futures contract of LEORGGE is over $ 990 million during the seven days ending on March 13.
Therefore, as the economic recession is easy, Bitcoin Price is likely to recover $ 90,000 in the next few weeks, given the elasticity of investor emotions.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.