Cryptheory – Just Crypto

Cryptocurrencies are our life! Get an Overview of Market News

Analysis of BTC futures data – BTC is not as bullish as it seems

2 min read

Traders with BTC  may feel extra euphoric after a recent increase. However, futures data suggests that bears are not too worried. A similar move has already taken place within the sideway structure and the price has not been able to break through $ 40,000.

Let’s analyze the data on derivatives and look at premium futures contracts and skew options. These indicators generally reveal how professional traders value the probability of a potential return at $ 36,000.

BTC / USD 4H.  Source: TradingView
BTC / USD 4H. Source: TradingView

Although the movement is not exactly the same, BTC crashed to $ 31,000 on June 8 and bounced to $ 41,000 six days later. The increase led to the liquidation of short contracts for $ 1.4 billion. The Bears apparently did not expect this move, but in less than three days BTC traded below $ 38,000 and initiated a downtrend. Bulls therefore have reason to doubt the sustainability of growth.

The futures premium did not show a significant recovery

One of the best metrics for measuring the optimism of professional traders is the premium in futures markets. It measures the difference between monthly contracts and current spot market levels. In healthy markets, an annual premium of 5 to 15% is expected. However, in bear markets, a backward scenario occurs and the indicator falls or becomes negative.

BTC 1-month futures premium on Huobi.  Source: Skew
BTC 1-month futures premium on Huobi. Source: Skew

According to the chart above, the monthly futures contract failed to receive an annualized premium of over 5%. There have been some periods of diversion over the last month, though the current level is considered neutral.

In order to exclude externalities specific to futures instruments, we should also analyze option markets. Whenever market makers and professional traders are bullish, they will demand a higher premium for call options. Such a trend is caused by a negative indicator of 25% delta skew.

Deribit BTC options 25% delta skew.  Source:
Deribit BTC options 25% delta skew. Source:

The current market is defined by neutrality

When the figure oscillates between a negative 10% and a positive 10%, the indicator is considered neutral. From May 14 to July 24, a 25% delta skew indicator signaled “fear”.

However, not even the recent increase to $ 40,000 was not enough to reverse the sentiment towards “greed”, as the indicator remains at a negative 4%.

According to both derivatives metrics, there is no bullish hint from professional traders. A price increase of 35% may have removed the recent pattern of fear, however it was not enough to overturn the sentiment.

Bitcoin Group

Disclaimer: This article is for information purposes only and should not be construed as investment advice.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

Leave a Reply