Bitcoin (BTC) futures open interest has recovered to May levels, raising optimism about a potent bullish breakout move above $50,000. The total number of outstanding futures contracts on the Deribit exchange reached $1.37 billion on Monday, its highest level since May 27. Meanwhile, the difference between the Bitcoin spot rate and its futures contract price widened, edging up its three-month basis (annualized) back to June levels, data provided by Stack Funds shows. The investment management firm saw the recovery as a sign of investors reentering the Bitcoin market while adopting a “more risk-on approach.” According to its head of research, …

Alternative financial services firm Valkyrie Digital Assets has become the latest company to file for a Bitcoin exchange-traded fund (ETF) offering indirect exposure to Bitcoin (BTC) via cash-settled futures contracts. According to a draft prospectus dated Aug. 11, the Bitcoin futures contracts will be purchased via a Cayman Island-based subsidiary wholly owned by the fund via exchanges registered with the United States Commodity Futures Trading Commission. The prospectus adds that the fund will initially exclusively invest in Bitcoin contracts that are traded on the Chicago Mercantile Exchange, with the ETF targeting a total notional value of its underlying futures contracts …

Bitcoin (BTC) might have failed to sustain the $42,000 support, and for many, this is a slightly bearish sign. Interestingly, the downward move occurred shortly after Saudi Aramco, Saudi Arabia’s largest oil exporter, denied having claimed to start mining Bitcoin. Top traders at exchanges seized the opportunity to add leverage-long positions, a clear bullishness indicator. Furthermore, margin traders have been increasing their stablecoin borrowing, indicating that whales and professional traders are expecting more upside from cryptocurrencies. The 24% weekly rally that took Bitcoin from $34,000 to its highest level since May 20 was fueled by a 30% surge in the …

There's no doubt that the last couple of months have been bearish for Bitcoin (BTC), but throughout this entire period, derivatives indicators have been relatively neutral. This could be because cryptocurrencies have a strong track record of volatility, and even 55% corrections from all-time highs are expected. After two months of struggling to sustain the $30,000 support and finally losing it on July 20, the futures premium and options skew turned bearish. Even PlanB's stock-to-flow valuation model was not expecting prices below $30,000 for the current month. The model uses the stock-to-flow ratio, which is defined by the current number …

It's not yet known whether Binance's recent news of being temporarily suspended from the U.K.’s financial system is the main driver behind today's Bitcoin (BTC) price drop. As Cointelegraph reported, the exchange sent emails to affected customers but has not given any details. Regardless of the reason behind the price weakness, derivatives contracts started to display some oddities, and this could be a troubling sign. Bitcoin quarterly futures are the preferred instruments of whales and arbitrage desks. Although it might seem complicated for retail traders due to their settlement date and price difference from spot markets, their most significant advantage …

Bitcoin (BTC) might be struggling to break the $36,000 resistance for the past three weeks, but bulls now have one less thing to worry about: cascading futures contracts liquidations. One might be under the impression that a $1 billion liquidation is usual for Bitcoin. Still, traders tend to remember the most recent exaggerated movements more than any other price shifts, especially when the price crashes and people lose money. This negativity bias means that even when various price impacts with equal intensity occur, the unpleasant emotions and events have a more significant effect on a trader's psychological state. For example, …

Bitcoin (BTC) might have tested the $40,000 support in mid-July, but according to various derivatives metrics, there has not been a significant change in investor optimism. This situation either means that price is not what they are looking for to mark the end of the current bear market or that most traders are still underwater at $40,000. One of the best measures of optimism is the futures market premium, which measures the gap between longer-term contracts and the current spot market levels. In healthy markets, a 5% to 15% annualized premium is expected. However, during bearish markets, this indicator fades …

Institutional exposure to cryptocurrencies via derivatives continued to grow in the second quarter, as CME Group’s newly launched Bitcoin (BTC) micro contract received considerable uptick in its first two months of trading. Since launching on May 3, CME’s Micro Bitcoin futures contract has already surpassed 1 million contracts traded, the Chicago-based derivatives market announced earlier this week. CME executive Tim McCourt said the new product has been popular among institutions and day traders seeking to hedge their spot Bitcoin price risk. Denominated at 0.1 BTC, the micro contract is one-tenth the size of one Bitcoin. By comparison, CME’s main Bitcoin …

Many traders entering cryptocurrency markets from traditional finance may look to derivatives as vehicles for price speculation and hedging. There are plenty of choices when it comes to exchanges and instruments; however, traders should consider a few key differences between crypto futures and traditional futures before dipping a toe into this rapidly growing market. Related: 3 things every crypto trader should know about derivatives exchanges Different instruments Traders entering cryptocurrency from the traditional markets will be accustomed to futures contracts with a fixed expiration date. Although fixed expiration contracts can be found in cryptocurrency markets, a significant proportion of crypto …

Perpetual contracts, also known as inverse swaps, have an embedded rate usually charged every eight hours. This fee ensures there are no exchange risk imbalances. Even though buyers' and sellers' open interest is matched at all times, leverage can vary, and when buyers (longs) are demanding more leverage, the funding rate turns positive. Thus, they are the ones paying the fees to the sellers (shorts). However, the opposite situation occurs when shorts require additional leverage, and this causes the funding rate to turn negative. The Bitcoin (BTC) futures funding rate has been negative since May 18 (37 days), and this …

Bitcoin’s price has slightly recovered from its sharp dip below $29,000, but generally, the past month has not been generous to Bitcoin (BTC) and Ether (ETH). Bitcoin has failed to break the $40,000 resistance multiple times, and the recent dip to a six-month low at $28,800 was a startling sign for many investors. After an incredible start in 2021, Ether peaked at $4,380 on May 12 but has dropped 55% since then. Unlike the leading cryptocurrency, the Ethereum network faces competition from projects that do not depend on proof-of-work, hence not facing the bottleneck issues that caused transaction fees to …

Goldman Sachs has debuted a Bitcoin (BTC) futures trading product for its client in collaboration with crypto investment giant Galaxy Digital. According to CNBC, the move marks the first time the Wall Street bank has partnered with a digital asset-based liquidity provider. Galaxy Digital co-president Damien Vanderwilt said the company offered a gateway to the crypto space allowing a tightly regulated entity like Goldman to offer crypto-related investment products. Goldman will reportedly be offering CME Group Bitcoin futures for its clients, marking another expansion of its recently established crypto trading desk. The move follows swiftly on the heels of an …