Bitcoin (BTC) was trading around $58,246.41 as of 20:00 UTC (4 p.m. ET). Slipping 1.31% within the past a day. Bitcoin’s range that is 24-hour $57,421.85-$59,484.20. BTC trades below its 10-hour and 50-hour averages on the chart that is hourly a bearish sign for market technicians.
Bitcoin's futures premium creeps back up
Recently, bitcoin’s cost motions have now been, well, less exciting compared to the triple- and sometimes quadruple-digit-percentage gains witnessed in alternate cryptocurrencies, or “altcoins.”
The number 1 cryptocurrency has exchanged in a range that is slim $56,552 and $60,102 in the last week, while ether, the indigenous token of this Ethereum blockchain, has climbed more than 20% to a new all-time high over $2,100.
However in the couple that is past, traders in bitcoin derivative areas have already been ratcheting up their bets on future gains.
The annualized futures premium rate – a measure of bullish bets – has averaged 22% to 25% on retail-focused derivatives exchanges like FTX, BitMEX, Deribit and Binance. That compares with about 13% on the CME that is Chicago-based trade which is commonly more dedicated to institutional investors.
An elevated futures premium – the spread between futures rates and spot-market prices – indicates that more retail traders are looking at upside exposure regarding the market despite bitcoin’s performance that is reasonably flat.
“Traders are expecting greater rates and dealing with jobs that are long” Bendik Norheim Schei, mind of research at Arcane Research.
However with the increasing bullishness comes a greater risk of a snap-back: the bitcoin market experienced a total $27.5 billion worth of long position liquidation during the first quarter of 2021, reflecting the massive quantity of leverage into the markets built up once the cryptocurrency that is largest rallied into the new year, since noted by Arcane Research in its weekly publication on April 6.
“It is obviously concerning when these futures premiums climb too high, showing an overly confident and market that is leveraged” according to Arcane. “This usually leads to rounds of liquidations and sharp pullbacks, therefore traders should consider de-risking in this present environment.”