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Sub-$10K Bitcoin price caused $653M open interest drop, largest since March

Pro traders bullish sentiment softened after Bitcoin futures open interest fell in tandem with traditional markets which also recorded notable losses.

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Bitcoin (BTC) futures open interest just had its most extensive daily reduction in five months. Yesterday’s 11% drop move caused more liquidations than May 9 when BTC plunged 12.5% to $8,600.

BTC futures open interest in USD terms

BTC futures open interest in USD terms. Source: Skew

Skew data shows total open interest down by $653 million, reaching $4 billion on Sept. 3. That figure includes perpetual (inverse swaps) and futures with set expiry on OKEx, CME, Binance, and remaining derivatives exchanges.

Yesterday’s move was the largest daily drop since the horrendous $1 billion cascading liquidation on March 13 caused a 50% drop in Bitcoin price. That same day marked the worst sell-off of the Dow Jones Industrial Average since 1987, a 10% drop.

The drastic correction might not have been such a record negative for stock markets, but the Nasdaq Composite tumbled 5%, led by Apple (AAPL -8%), Salesforce (CRM -7.8%), and Microsoft (MSF -6.2%).

Apple (AAPL) shares slid 8% on Sept. 3, causing its market capitalization to recede by $180 billion. This was the most extensive daily loss for a single company. By comparison, currently Bitcoin’s market capitalization stands at $194 billion.

The iPhone maker is currently valued at slightly over $2 trillion. Such an impressive figure could acquire the entire altcoin market, paying a 1.300% premium to the current $140 billion altcoin market capitalization.

The futures premium temporarily vanished

Futures markets tend to trade at a slight premium to regular spot exchanges. This is not something exclusive of cryptocurrencies markets, but rather a derivatives effect. By postponing the financial settlement for a trade, sellers usually demand more money.

This futures contracts premium indicator is known as basis and it usually ranges between a 5% to 15% annualized rate. Whenever the premium is positive, the market is characterized as in contango. On the other hand, a zero to negative future contracts premium is unusual and indicates bearish sentiment.

BTC 3-month futures annualized basis

BTC 3-month futures annualized basis. Source: Skew

The above chart shows how significant yesterday’s brief sub-$10K drop was on futures markets. Such a negative premium situation, known as backwardation, was last seen four months ago on May 10. Back then, Bitcoin (BTC) quickly recovered over the following three days, causing the basis indicator to regain positive territory.

The current 4% annualized basis can’t be deemed bearish, although undeniably not bullish as the 10% level from three days ago.

Short-term options are back to bearish levels

Bitcoin option markets are also susceptible to significant price changes. Similar to the futures market, the recent BTC dip caused major risk aversion movements. Market makers often increase spreads during periods of volatility, thus, what happens on the following day is most telling.

The 25% delta skew indicator compares similar call (buy) and put (sell) options side-by-side. The indicator will turn negative when put options premium is higher than similar-risk call options. Such negative skew translates to a higher cost of downside protection, indicating bullishness.

The opposite holds when market makers are bearish, causing the 25% delta skew indicator to gain positive ground.

BTC options 25% delta skew

BTC options 25% delta skew. Source: Skew

Although numbers are different depending on how far those options expiry is, short-term ones usually display a more considerable impact. Yesterday’s sharp Bitcoin (BTC) drop caused the 1-month 25% delta skew to rise above 10%. As the above chart shows, ranges from -10% (slightly bullish) to +10% (somewhat bearish) are usual.

It seems premature to conclude that options markets are displaying bearish sentiment, especially when analyzing longer-term options. Nevertheless, large traders and market makers seem to be risk-averse right now, at least for pricing downside protection options.

Bitcoin derivatives remain healthy

Despite the Bitcoin futures open interest drop, it’s aggregate notional value of $4 billion remains higher than two or three months ago. The same can be said by the current futures 4% premium (basis), which is far from bearish backwardation levels.

One should keep in mind that cryptocurrencies markets are incredibly volatile, and negative stock market swings also impact investors. No further evidence is needed after the two most largest BTC futures liquidation events happening on the exact same day of historical stock market crashes.

Those events prove that even uncorrelated markets may eventually reach peaks and valleys at similar times regardless of their different drivers. The current global macroeconomic scenario seems to be the most dominant force driving risk assets, including Bitcoin.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Source: https://cointelegraph.com/news/sub-10k-bitcoin-price-caused-653m-open-interest-drop-largest-since-march

Blockchain

Economist: Ethereum and Bitcoin Look “Bullish” After Withstanding “Macro Beating”

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Bitcoin and Ethereum are down from their recent 2021 highs, but compared to their traditional market counterparts, have shown more resilience during the recent “royal macro beating.”

Here’s why one top economist and investor says this is incredibly bullish for the two titan cryptocurrency assets.

Royal Macro Beating Can’t Take Down Bullish Bitcoin And Ethereum

This week, the stock market plunged, and precious metals saw a sharp selloff as the macro environment remains uneasy globally. Yet somehow, amidst a “royal macro beating”, Ethereum and Bitcoin have held up comparably well.

Economist and trader Alex Kruger says the resiliency is “bullish” for Bitcoin and Ethereum. The two top crypto assets have been in an uptrend for a full year now, and the recent macro jitters have been the first major bump in the road since.

Related Reading | “Wonderful” Shark Tank Investor Shifts Portion of Portfolio To Bitcoin and Ethereum 

Bitcoin exploded from lows around $4,000 to $58,000 per » Read more

” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin at the high, while Ethereum fell to under $100 and has risen to $2,000 since. The more than 10x rise, however, might be nowhere near the finish line, and holding up so well here could be the catalyst that sends the cryptocurrencies higher through the resistance level.

bitcoin and Ethereum macro beating

Ethereum and Bitcoin have held up extremely well compared to the S&P 500 and gold. | ETHUSD on TradingView.com

The Changing Of The Guard To Crypto Is Underway

The stock market is on thin ice, and precious metals cannot be upgraded or updated, and have limited use in the future as a store of value compared to cryptocurrencies.

The digital gold narrative has been working, and the steepness of the gold selloff above shows how effective the narrative has been. Crypto prices holding up so well while gold plummets, could send even more capital flowing out of metals and into the scarce digital asset.

Related Reading | Mark Cuban Slams Peter Schiff: Gold is Dead, Bitcoin and Ethereum Are Today

Profit-taking in the currency overheated stock market will want to follow the money, wherever the grass is greener and profits are consistent. If that place is the crypto market, the flood gates of capital could finally be coming that helps to push Bitcoin to prices of hundreds of thousands of dollars per » Read more

” href=”https://www.newsbtc.com/dictionary/coin/” data-wpel-link=”internal”>coin, and tens of thousands of dollars per Ether.

The nascent technologies are only now coming into their own as financial assets, and institutional investors have begun to recognize the shift from traditional assets, to digital ones, and the ones who have been early thus far have been the most profitable.

Will Bitcoin and Ethereum continue to hold up this well, or will they ultimately succumb to the continuing macro beating going on across markets right now?

Featured image from Deposit Photos, Charts from TradingView.com

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Source: https://www.newsbtc.com/news/bitcoin/ethereum-bitcoin-macro-beating-gold/

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Blockchain

3 million active users help lift Audius (AUDIO) to a new all-time high

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As blockchain technology increasingly becomes part of the mainstream conversation, its integration with today’s most used technologies is bound to increase. This means that it’s only a matter of time before video streaming, digital music and social media see gradual blockchain integrations take place. 

Audius (AUDIO) is one project that is chasing the first-mover advantage in the music streaming sector. The music-sharing and streaming protocol facilitates transactions between creators and listeners, making it relatively effortless for users to distribute and monetize audio content. 

The project has received increasing attention for its approach to decentralizing the music industry and on March 2 the team celebrated reaching 3 million monthly active users. 

Data from Cointelegraph Markets and TradingView shows that the price of AUDIO surged 108% since the start of March from a low of $0.38 to a new all-time high of $0.79 on March 4 as the altcoin’s trading volume spiked from $3 million to a record $55 million.

AUDIO/USDT 4-hour chart. Source: TradingView

Staking incentives drive user adoption

The first major increase in users followed the project’s October 2020 launch and the activation of staking on the Audius platform in December. This enabled AUDIO holders to earn a 7% yield for tokens that were staked on the network while they listening to music and interacted with the protocol.

By the end of January, the platform had 1.8 million active users and a total of 122 million AUDIO tokens staked on the network. These figures have since increased to 3 million users and a total of 182.5 million staked AUDIO as the platform continues to integrate new features that incentivize community involvement.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for AUDIO on Feb. 28, prior to the recent price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. AUDIO price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ score for AUDIO hit a peak of 69 on Feb. 28, just before the start of a prolonged uptrend in price which was further identified by a VORTECS™ score of 80 on March 1. After pulling back over the next 3 days the score again spiked to 70, just hours before a significant rise in the price of AUDIO.

On March 5, the project revealed its plans to integrate non-fungible tokens (NFT) into the protocol as part of its effort to offer a full-service decentralized platform and expand its user base.

NFTs have become a hot topic in the cryptocurrency sector in recent months, and their integration into the AUDIO platform is likely to bring a renewed wave of interaction from users.

As blockchain technology continues to become more prominent in mainstream society, Audius appears well-positioned to become a leader in the streaming music space thanks to a rapidly expanding user base and a growing list of incentives that entice users to stay active on the platform.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Source: https://cointelegraph.com/news/3-million-active-users-help-lift-audius-audio-to-a-new-all-time-high

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Bybit to Cease Services for UK Citizens Following the FCA Ban on Crypto Derivatives Trading

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The first consequences from the FCA ban on crypto derivatives trading in the UK are evident for the popular digital asset exchange Bybit. The company announced earlier that it will suspend its services to all customers based in the United Kingdom. 

  • Established in 2018, Bybit is a cryptocurrency exchange headquartered in Singapore with a reported user base of over one million registered clients. However, the firm will seize offering its services to UK-based customers, according to a recent press release
  • The statement informed that all UK users have to close all of their opened positions and withdraw all account balances by 8 AM UTC, March 31st, 2021. Following that date, UK citizens will be “restricted from accessing or performing any trading activities on Bybit.” 
  • Furthermore, the exchange will immediately restrict all new registrations using UK mobile numbers and/or IP addresses. 
  • Bybit’s decision is a direct consequence of a ban on crypto derivatives trading in the UK instituted by the country’s regulator – the Financial Conduct Authority (FCA). 
  • CryptoPotato reported last year that the watchdog planned to prohibit the sale, marketing, and distribution to all retail customers of crypto derivatives and exchange-traded notes (ETNs).  
  • At the time, the FCA described such products as “ill-suited for retail customers due to the harm they pose.” It also outlined that traders are unable to determine a reliable value because of the extreme volatility in the market and inadequate understanding. 
  • Interestingly, though, even the UK population couldn’t stop the FCA from implementing the ban as a survey compiled by the watchdog suggested that over 97% disagreed with the decision. 
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Source: https://cryptopotato.com/bybit-to-cease-services-for-uk-citizens-following-the-fca-ban-on-crypto-derivatives-trading/

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