There was a 17% drop in the Bitcoin price within seven days. After that, market data shows investors turn cautious.
Skew market data shows that investors in the BTC (Bitcoin) options market are cautiously bearish in the short term as of September 8. The shift in sentiment came after Bitcoin’s abrupt 17% drop in seven days.
For the fourth consecutive day, Bitcoin fell below the $10,000 support level. Some analysts are saying that the repeated test of the same level is a bearish sign. Others say that the crypto shows resilience in a critical support area.
BitMEX rarely saw long contract liquidations total above $50 million throughout the recent pullbacks.
BitMEX tends to see liquidations above $80 to $100 million, typically when the price of Bitcoin falls by 5% to 15%.
The lackluster liquidations on major exchanges of futures come from a relatively low open interest. The term open interest refers to the total amount of long and short contracts open at a certain time.
The futures market data is indicating that most of the selling pressure did not come from cascading liquidations. Instead, whales or miners taking profit on their holdings most probably triggered the sharp pullback since early September.
Because the futures market has been stagnating, the options could become more relevant in the short term.
Generally, traders in the cryptocurrencies use two types of derivatives to trade Bitcoin: futures and options.
Options open interest started to recover since August 28, while the aggregated open interest of Bitcoin futures has been falling.
Skew Researchers wrote that Bitcoin options flows show that the long-term is bullish, the short-term is bearish, and the medium-term is neutral.
Traders explore three main areas: the $10,620 CME gap, Bitcoin whale buy orders at $8,800, and the $9,650 CME gap.
CME chart has a fresh gap of 10620. Usually, most of the gaps are filled within a few days max.