Bitcoin derivatives show a lack of confidence from bulls
The price of Bitcoin (BTC) has been rising since the middle of July, although $21,100 is currently a support level due to the ascending channel formation. This pattern, which has persisted for 45 days, may push Bitcoin toward $26,000 by the end of August, as reported by Cointelegraph.
Investor mistrust is mostly caused by the link to traditional assets, particularly when recession risks and tensions between the United States and China are included in before House Speaker Nancy Pelosi’s trip to Taiwan. Chinese officials reportedly vowed to act if Pelosi proceeded forward, according to CNBC.
Recent interest rate increases by the U.S. Federal Reserve to combat inflation increased risk for risky assets and slowed the rebound of cryptocurrency prices. Investors are placing their bets on a “soft landing,” which would allow the central bank to gradually end its stimulus programmes without significantly increasing unemployment or triggering a recession.
Recent interest rate increases by the U.S. Federal Reserve, intended to fight inflation, increased risk assets’ level of uncertainty and slowed the rebound of cryptocurrency prices. Investors are counting on a “soft landing,” which would allow the central bank to gradually curtail its stimulus measures without significantly increasing unemployment or triggering a recession.
The correlation index varies from a negative 1, which indicates that certain markets move in opposition, to a positive 1, which indicates that all markets move perfectly and symmetrically. 0 would reflect a difference or a lack of connection between the two items.
Blockchain derivatives metrics show no symbol of “fear” from traders. Because of its fixed settlement date and price disparity from spot markets, monthly futures are typically avoided by retail traders. However, because there is no variable funding rate, arbitrage desks and experienced traders prefer monthly contracts.
As sellers seek a higher price to defer settlement for a longer period of time, these fixed-month contracts typically trade at a little premium to standard spot markets. Technically referred to be “contango,” this circumstance is not unique to cryptocurrency markets.
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