The market data presented on September 8th by Skew shows that investors in the Bitcoin options market (BTC) are cautiously bearish in the short term. The change in sentiment comes after the sharp 17% drop marked by BTC within seven days.
Bitcoin dropped below the support level to $10,000 for the fourth consecutive day. Some analysts believe that repeated testing at the same level is a bearish signal. Others say that BTC is showing resilience near an important support zone.
This time the options market on Bitcoin could offer more relevant data
During the recent pullbacks, BitMEX has rarely had long contract liquidations in excess of $50 million.
Typically, when the price of Bitcoin Rush loses 5% to 15%, BitMEX tends to see liquidations between $80 and $100 million.
Poor liquidations on major futures exchanges are due to relatively low open interest. The term open interest refers to the total amount of short and long contracts open at a given time.
The data provided by the futures market indicates that much of the sales pressure was not caused by a cascade of liquidations, but by the sale of real estate by miners or whales, which probably triggered the strong pullback that started in early September.
Option data may become more important in the short term as the futures market has stagnated.
Usually traders in the cryptocurrency market use two types of Bitcoin-based derivatives: options and futures.
While the aggregate open interest of futures on Bitcoin is decreasing, that of options started to recover on August 28th. Skew researchers have commented:
„The flows in Bitcoin options indicate: short term bearish, medium term neutral, long term bullish. A correct representation of consensus?“