The data shows that derivatives have little to do with Bitcoin price falling below $29,000

Bitcoin’s price (BTC) shocked investors when it fell below $ 29,000. This is the lowest level in the last 6 months. Additionally, the data shows that derivatives have little to do with Bitcoin’s recent sharp decline.

Data shows that derivatives have little to do with Bitcoin price falling below $ 29,000

Bitcoin investors believe that after the bear market rallied to around $ 41,000 on June 14th, the following week, starting on June 21st, Bitcoin fell sharply by 30%.

This causes BTC to hit its lowest price for the first time since January 22, 2021. The sell-off was largely driven by the fact that BTC miners in China were forced to close their operations. In addition, the People’s Bank of China (PBoC) stated on June 21 that all banks and mobile payment applications are “not allowed to offer a service to open or register an account for commercial activities” related to cryptocurrencies.

In addition to the news from China, many are also wondering whether derivatives will play an important role in the recent event?

As CoinCu explained in the article Is this the reason for the Bitcoin “crash” yesterday ?, the derivatives market has exacerbated the shocks. tilt from BTC recently.

The premiums of futures contracts show no signs of decline

Premium for futures contracts (Futures premium) is a tool to measure the price gap of a futures contract (Future) compared to the spot price (Job). Whenever this indicator fades or goes negative, it is an alarm condition. This situation is also known as a “preemptive sale”. (backward) as well as forecast a bearish mood (bearish mood).

Futures contract premium for the past 3 months on Huobi. Source: Skew

Futures contracts should trade in healthy markets at a premium in the range of 5-15% / year, also known as “bump-back”. (Kontango). In the worst time of June 22nd, this premium bottomed out at 2.5% and is seen as a bearish feeling. However, this is not enough to trigger a warning condition!

Top traders don’t panic

Indicators long short the top trader is calculated based on the user’s consolidated positions. This includes spot orders, margin orders and open-ended contracts (unlimited) and futures contract (Futures). This metric captures a broader view of the professional trader’s position.

Ratio of long / short orders from futures exchanges. Source: Bybt

As can be seen in the picture above, top traders at Binance have increased their positions Long compared to position short on June 22nd

At the Huobi exchange, the order rate is reversed short increased, but this is not uncommon as this indicator reached the same level two days earlier (i.e. 20/06). Finally, also on June 20, large traders on the OKEx floor reduced their orders Long.

Long orders for futures contracts liquidated $ 600 million triệu

Based on June 22nd futures liquidation data, nearly $ 600 million orders Long liquidated, that number is below $ 750 million as of June 21.

Liquidation of the futures contract (long orders are red). Source:

Commands Long This used excessive leverage (Over-indebtedness) and a 20% drop in Bitcoin triggered stop orders (Stop order) of orders with too much leverage.

Finally, the data shows no evidence of pressure from the command Long or potentially negative volatility caused by the derivatives market.


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