Bitcoin futures demand rises even as BTC sells off: What gives?

2 hours ago

Key takeaways:

Bitcoin futures request continues rising contempt the caller terms weakness, indicating sustained trader engagement.
The enactment options maintained a premium implicit calls, reflecting persistent bearish sentiment among investors.

Bitcoin (BTC) traded down to $109,400 connected Monday, its lowest level successful much than six weeks. The correction followed an $11 cardinal sale by a 5-year dormant whale that had been dormant for 5 years, with proceeds rotating into Ether (ETH) spot and futures connected decentralized speech Hyperliquid.

Despite the terms decline, request for Bitcoin futures surged to an all-time high, prompting traders to inquire whether $120,000 is the adjacent logical step.

Bitcoin futures unfastened involvement climbed to an all-time precocious of BTC 762,700 connected Monday, up 13% from 2 weeks earlier. The stronger request for leveraged positions shows traders are not abandoning the marketplace contempt a 10% terms driblet since Bitcoin’s all-time precocious connected Aug. 14.

While this is simply a affirmative indicator, the $85 cardinal successful futures unfastened involvement does not needfully bespeak optimism, since longs (buyers) and shorts (sellers) are ever matched. If bulls thin excessively heavy connected leverage, a dip beneath $110,000 could trigger cascading liquidations.

The Bitcoin futures premium is presently astatine a neutral 8%, up from 6% the erstwhile week. Notably, the metric has not remained supra the 10% neutral threshold for much than six months, meaning adjacent the $124,176 all-time precocious failed to instill wide bullishness.

Leverage shakeout highlights liquidity but sparks suspicion

The caller diminution blindsided overleveraged traders, starring to $284 cardinal successful liquidations of agelong positions, according to CoinGlass data. The lawsuit showed that Bitcoin maintains heavy liquidity adjacent connected weekends, but the velocity of execution raised suspicions, fixed that the seller had held the presumption for years.

The Bitcoin perpetual futures backing complaint dropped backmost to 11% aft a short-lived uptick. In neutral markets, the complaint usually ranges betwixt 8% and 12%. Some of the muted sentiment tin beryllium explained by $1.2 cardinal successful nett outflows from US-listed spot Bitcoin ETFs betwixt Aug. 15 and Aug. 22.

To measure whether this level of caution is worrying, traders should analyse the BTC options market.

Put (sell) options are presently trading astatine a 10% premium implicit telephone (buy) instruments, a wide motion of bearish sentiment. While excessive fearfulness is evident, it is not antithetic pursuing a $6,050 Bitcoin terms driblet successful conscionable 2 days. Market science has apt been influenced by whales shifting vulnerability from Bitcoin to Ether, though specified flows thin to stabilize implicit time.

Although caller weakness has weighed connected sentiment, the imaginable of a Bitcoin rally toward $120,000 has not vanished. Still, immoderate sustained upside apt hinges connected renewed spot ETF inflows, particularly arsenic planetary maturation remains uncertain. For now, the $13.8 cardinal monthly options expiry connected Friday could service arsenic the catalyst that determines whether investors re-enter the market.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

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