BTC traders set prices in uncertainty through the derivatives market, but the supply of cryptocene in the chain remains stable. This indicates that the market is ready for stormy march according to Glassnode on-chain data provider. So let’s summarize the most important findings from this report.
- There are no signs of fear-driven mass exodus, as data show that spot holdings and fund flows remain stable.
- The market is clear investor uncertainty in terms of the broader economic impact of the US dollar given the previous decades of loose monetary policy.
- Given the expected volatility due to the upcoming US Federal Reserve rate increase traders reduce their exposure to leveraged assets through a process called de-leveraging.
- This leads to what Glassnode calls the “flattening” of the futures structure of futures. This means that the estimated price of BTC on the futures market is currently getting lower and lower.
- Futures, which expires at the end of 2022, currently have a strike price of $ 44,200. This represents a 6 percent annual premium, which Glassnode calls “very modest.”
BTC Hodlers are still stable according to Glassnode
- “Investors are using derivatives markets to hedge against risk and to buy downside protection. They are watching closely Fed rate hike, which is expected in March. In the meantime, it seems that the overall supply dynamics in the chain is in the form of equilibrium,”Glassnode wrote.
- Deleveraging is done by traders closing positions, not for liquidation. Liquidation occurs when the price of an asset experiences a sharp decline, leading to the closing of long derivative positions, which further reduces the price of the underlying asset.
- Glassnode also notes that it still exists strong conviction of hodler as the supply of BTC held by long-term holders remains stable.