The Bitcoin Futures Basis Surges to Levels Not Seen Since 2021 All-Time High
The bitcoin futures basis, which refers to the difference between the futures and spot price, has reached levels that havenโt been seen since the cryptocurrencyโs previous all-time high in late 2021. According to Deribit Chief Commercial Officer Luuk Strijers, the current annualized basis ranges from 18% to 25%, indicating a bullish indicator in the market. This high basis allows derivatives traders to lock in significant returns by buying spot bitcoin and selling futures contracts at a higher price. The trade provides a guaranteed dollar gain at expiry, regardless of bitcoinโs fluctuating value.
Disparity Between Spot Price and Futures Price Reflects Growing Market Momentum
Strijers believes that the disparity between the spot price of bitcoin and its futures price is a reflection of the growing market momentum since the approval of ETFs in January and the expectations surrounding the impact of the bitcoin halving. He attributes this yieldโs incredibly high level to daily new money flowing into the system due to the approval of spot bitcoin ETFs and anticipated effects of the halving.
Put-Call Ratio for Bitcoin Options Indicates Bullish Sentiment
In the bitcoin options market, there has been an increase in outstanding calls compared to puts leading up to the end of March expiry. Strijers notes that the put-call ratio for bitcoin is currently 0.59, indicating a preference for calls over puts among derivatives traders. A put-call options ratio below one suggests that call volume exceeds put volume, indicating bullish sentiment in the market.
What is a Put-Call Ratio?
- A put-call ratio compares the trading volume of put options to call options within a specific time frame.
- A ratio below one suggests a higher preference for calls over puts, indicating bullish sentiment.
- A ratio above one suggests a higher preference for puts over calls, indicating bearish sentiment.
Bitcoin Experiences Price Correction and Liquidation of Long Positions
In the past 24 hours, bitcoin experienced a price correction after reaching a new all-time high of over $73,000. This volatility led to the liquidation of more than $278 million in bitcoin positions, with the majority being long positions. CoinGlass data shows that $225 million in longs were liquidated. As a result, the price of bitcoin has decreased by over 4% and is currently trading at $68,446.
GM 30 Index Decreases by 4.48%
The GM 30 Index, which represents a selection of the top 30 cryptocurrencies, has also experienced a decrease of 4.48% in the past 24 hours. It is currently valued at 152.83.
Hot Take: Bitcoin Futures Basis Reaches New Heights Amid Growing Market Momentum
The surge in the bitcoin futures basis to levels not seen since the previous all-time high indicates a bullish indicator in the market. The increasing disparity between the spot price and futures price reflects the growing market momentum following ETF approvals and expectations surrounding the bitcoin halving. Additionally, the put-call ratio for bitcoin options suggests that derivatives traders have a higher preference for calls over puts, further indicating bullish sentiment. However, recent price corrections and liquidation of long positions highlight the volatility in the market. It will be interesting to see how these factors continue to shape the future of bitcoin and cryptocurrency trading.
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