dYdX exchange releases governance token, making its airdrop worth up to $100K

September 8, 2021 Coin Telegraph

Airdrop

The DYDX governance token becomes the latest airdrop to surpass $100,000 for the most active users, and the DEX's transaction volumes highlight the rising popularity of layer-2 platforms.

Airdrops have been a fan-favorite in the cryptocurrency ecosystem for years because they offer projects a way to reward early adopters and increase token distribution.

The latest project to surprise its community of supporters with retroactive rewards for its newly minted token is dYdX, a non-custodial decentralized derivatives exchange that operates on a layer-2 version of the Ethereum (ETH) network.

Data from CoinGecko shows that on its first day of trading live in the markets, DYDX is trading at a price of $10.28 at the time of writing after hitting an intra-day high at $14.24.

*DYDX/USD 5-min chart. Source:* *CoinGecko*

The number of tokens received by each user was determined by their previous trading actively on the platform, with the lowest tier user receiving 310 tokens for trading at least $1 on the exchange, and the highest tier user earning 9,529 tokens for trading volumes exceeding $1 million.

*Airdrop token distribution. Source:* *dYdX Foundation*

At the daily high of $14.24, the airdrop was worth between $4,414 and $135,692 with the average user who traded between $1,000 and $10,000 in value on the platform receiving 1,163 DYDX worth $16,561.

The ongoing shift to layer-two solutions

The retroactive 'release' of the DYDX governance token marks a big step for the protocol as it embarks on its path to becoming a fully decentralized, community-governed platform. It is and another sign of a larger shift by a growing number of projects shifting to layer-two solutions in order to operate in a lower fee environment.

Many blockchain projects are migrating to various cross-chain and layer-two solutions like Polygon and dYdX was actually one of the first decentralized exchanges to announce that it would launch on StarkWare, a layer-two solution it developed in conjunction with StarkEx.

According to data from dYdX, at the close of the first mining epoch, there were 32,700 DYDX holders and the platform had transacted $13.8 billion in monthly trading volume and $141 million in market-maker capital has been staked.

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.

Analysts point to overleveraged traders after Bitcoin flash crashes to $43K

September 7, 2021 Coin Telegraph

Analysts point to overleveraged traders after Bitcoin flash crashes to K

bitcoin futures

Traders were hit hard as $3.5 billion in liquidations took place as Bitcoin price crashed below $43,000.

Traders were caught flat-footed on Sept. 7 after a sharp collapse in the price of Bitcoin saw the digital asset fall below $43,000 and this led to widespread liquidations in derivative markets as more than $3.54 billion was liquidated.

Amount of Liquidations in the past 24 hours by exchanges in total $3.54 was liquidated!

In the past 24 hours, 330,243 traders were liquidated. The largest single liquidation order happened on @HuobiGlobal #BTC $BTC value $43.7M

Data source: @bybt_com pic.twitter.com/hNgctWgCgP
— CryptoDiffer (@CryptoDiffer) September 7, 2021

Bullish sentiment had been on the rise coming out of the Labor Day holiday weekend in the United States because Bitcoin was officially recognized as legal tender in El Salvador, but the celebration was quickly extinguished by BTC's 16% plunge.

Data from Cointelegraph Markets Pro and TradingView shows that the sell-off in BTC began during the early trading hours and accelerated into midday as the price of Bitcoin fell to a low of $42,837 before dip buyers arrived to bid it back above $46,500.

*BTC/USDT 4-hour chart. Source:* *TradingView*

Here’s what traders are saying about this rapid sell-off and what to be on the lookout for as the market attempts to digest the chaos of the day.

Longs are heavily liquidated as BTC sells off

A fact-focused analysis of the current state of the market was offered by on-chain analyst Willy Woo, who posted the following tweet outlining today’s developments.

Day opened with equities risk-off.

Some sell down of BTC.

Medium levels of fundamental inflows (selling).

Then stop hunt / liquidity collapse.

$1.1b of BTC liquidations.

Overall unsupported by investor fundamentals on-chain.

Exchanges are now in outflows (buying)
— Willy Woo (@woonomic) September 7, 2021

As noted by Woo, the wider financial markets opened the day risk-off, which put pressure on the crypto market that cascaded as the day progressed.

The ensuing sell-off resulted in $1.1 billion worth of Bitcoin liquidations, but on-chain data does not suggest that investors are in a rush to close their positions and the most recent activity shows that exchanges are back in buying mode.

A follow-up tweet from Woo shows just how unexpected today’s move in the market was, a good reminder that risk management is always something to keep in mind in the crypto market.

Woo said,

“Not entirely sure WTF just happened, but that's the sequence of events. The sell-off was mainly on derivative markets (like most crashes).”

Possible outlier detected

Further analysis of today’s move in Bitcoin was provided by market analyst and Cointelegraph contributor Michaël van de Poppe, who also highlighted the role that overleveraged traders played in today’s price action.

#Bitcoin lost that $49K level as crucial support and smacked through it.

What just happened?

Overleveraged positions getting liquidated in a chain reaction, causing a massive wick.

If this wick closes above $47/48K, it will be an outlier.

Opportunities.
— Michaël van de Poppe (@CryptoMichNL) September 7, 2021

According to Poppe, if BTC can manage to close above the $47,000 to $48,000 range following this pullback, the move will be considered an outlier to the previously-established trend and a good buying opportunity, should the uptrend resume.

Not all traders were caught off guard

Not all participants in the market were caught unawares by today’s downside move, as highlighted in the following tweet posted by analyst and pseudonymous Twitter user Crypto_Ed_NL.

Feeling lucky you did not get liquidated in that corrective move earlier today?
Wait with getting new, dry pants...might not be over yet! pic.twitter.com/DIp9USNfK7
— Crypto_Ed_NL (@Crypto_Ed_NL) September 7, 2021

A follow-up tweet included the following chart showing that the scenario played out just as Crypto_Ed_NL had warned.

*BTC/USDT 15-min chart. Source:* *Twitter*

Crypto_Ed_NL said,

“BTC reached the green box. Let’s see how it bounces… should be it for this correction in my opinion.

The overall cryptocurrency market cap now stands at $2.103 trillion and Bitcoin’s dominance rate is 42.1%.

Expanding ecosystem and LedgerX acquisition send FTX Token (FTT) to a new ATH

September 1, 2021 Coin Telegraph

Adoption

FTT price soared to a new all-time high after FTX exchange added LedgerX to its ever-expanding list of acquisitions and partnerships.

Real-world adoption and brand awareness are one of the best ways for a blockchain project to increase its value and attract new users to users to its ecosystem.

One project that has seen massive growth throughout 2021 thanks to its increasing public exposure and exciting protocol launches and partnerships is FTX, a crypto-derivatives trading platform founded by Sam Bankman-Fried and Gary Wang.

Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low near $50 on Aug. 31, the price of FTT catapulted 42% higher to a new all-time high at $66.50 on Sep. 1 as its 24-hour trading volume increased by 200% to $1.675 billion.

*FTT/USDT 4-hour chart. Source:* *TradingView*

The sudden burst in momentum came following the Aug. 31 announcement that FTX US, the United States-based arm of the exchange, would be acquiring LedgerX, a fully licensed, U.S.-based options and futures trading platform.

We are excited to announce that FTX US is acquiring LedgerX!

We look forward to partnering with the @LedgerX team to offer CFTC-regulated crypto derivatives to the US market. pic.twitter.com/6VgH4psaL5
— FTX - Built By Traders, For Traders (@FTX_Official) August 31, 2021

Through this acquisition, the company will now be able to offer regulated crypto futures and options trading to the US market.

FTX has had a busy year of partnerships and publicity generating moves such as purchasing the naming rights for several stadiums and becoming the official crypto exchange sponsor of Major League Baseball, but many feel that this is the biggest development to date for the platform because it gives FTX US a unique product in the US marketplace.

And just to show that it also has an ear on the pulse of the cryptocurrency community, FTX also recently announced plans to list the up and coming Star Atlas gaming metaverse and NFT ecosystems, a highly anticipated project that looks to capture the surging momentum of the NFT and gaming sectors.

That's one small step for a man, one giant #listing for mankind. - @staratlas pic.twitter.com/MCY72eWNsN
— FTX - Built By Traders, For Traders (@FTX_Official) August 31, 2021

Crypto Assets: Securities or Commodities? Commissioner Explains How They Are Regulated in US

August 30, 2021 Bitcoin.com

Bitcoin futures open interest at 3-month highs — But will it be enough to overcome $50K?

August 26, 2021 Coin Telegraph

Bitcoin

The indicators, coupled with a strong bid momentum versus the offers, suggest that Bitcoin’s price could push above $50,000 in the coming sessions.

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.

*Bitcoin futures OI and 3-month basis. Source: Stack Funds*

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, Lennard Neo, the “contango trading” of the Bitcoin futures reflected that “investors’ sentiments remain skewed towards bullishness.” He wrote in a report:

“More importantly, we have observed consistent strength in bid momentum versus the offers, leading us to believe that markets will be well-supported at least in the near term, with further consolidation before breaking $50,000.”

Retail’s influence on Bitcoin’s price

In June, Bitcoin futures collapsed under the weight of a brutal sell-off in the world’s largest cryptocurrency spot market. The downside move from $41,322 to $28,800 expunged the basis trade, wherein a trader buys Bitcoin in the spot market and sells long-dated futures to lock in the disparity between the two prices.

So it appeared, leveraged futures traders unwound their long positions to meet margin calls — that is, via automatic liquidation mechanisms on exchanges. That reduced the gap between the Bitcoin futures prices and the spot, raising fears of negative premium on futures contracts, also called backwardation.

On Deribit, the three-month basis (annualized) was around 2.5%. But in ideal “contango” circumstances, futures should trade at a 5%–15% annualized premium according to the stablecoin lending rate.

Cointelegraph reported that the June drop had less to do with long liquidation and more with miners’ capitulation. It cited China’s crackdown on regional crypto firms around the same time Bitcoin prices plunged, noting that the decision forced crypto miners to shut down operations abruptly and, in turn, sell their Bitcoin holdings en masse to cover losses.

*Bitcoin spot rates fell over 30% in just seven days in June 2021. Source: TradingView*

$50,000 a psychological barrier

Entering August, Bitcoin has brushed aside most mining concerns, with a recent Glassnode report indicating that miners have started reaccumulating tokens. Meanwhile, persistently high inflation reports in the United States have also boosted Bitcoin’s safe-haven narrative among accredited investors.

That partially explains why Bitcoin bottomed out near $29,000 and rose back to $50,000 in over a month. It also underscores the spike in futures open interest and basis trading, signaling renewed buying interest among investors and traders alike.

But Neo saw a potential glitch. The researcher highlighted Bitcoin’s recent failure to close above its psychological resistance at $50,000, noting that it could put the brakes on its imminent rally. He added:

“The fact that the 3-month basis has not broke June levels and is still way off Apr levels suggests that real demand and speculation remain conservative.”

Bitcoin was trading at $46,888, about 7.78% below its sessional high of $50,505, at the time of writing.

Bears lick their paws while Bitcoin price blasts through $46,000

August 9, 2021 Coin Telegraph

Bears lick their paws while Bitcoin price blasts through ,000

bitcoin futures

Derivatives data show the market is dominated by longs and that top traders added leverage as BTC price rallied to $46,300.

Bitcoin (BTC) hiked 20% in seven days in an unexpected move that brought the price to its highest level since May 18. The price appreciation happened despite U.S. Treasury Secretary Janet Yellen reportedly supporting a broader definition of crypto companies in the HR 3684 infrastructure bill currently being considered in the U.S. Senate.

Even though Bitcoin price continues to surge higher, investors are worried that regulation could erase the recent gains, but derivatives indicators show no sign of confidence from the bears.

*Bitcoin price at Coinbase, in USD. Source: TradingView*

The proposal mandates that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service, including validators, miners, and protocol developers. However, Senator Cynthia Lummis and Senator Pat Toomey are lobbying to focus those requirements exclusively on brokers and the exchanges.

Holders keep 'hodling' and inflation benefits the crypto market

On-chain analysis firm Glassnode highlighted that coins held for 12 months and longer are not being moved despite the strong rally, indicating a "holding behavior." Meanwhile, the Crypto Fear and Greed Index, a well-known indicator that tracks volatility, volume, social media, dominance and Google searches, moved from "moderate" to "greed."

The 74 point indicator reached on August 8 was the highest level since April 18, indicating that investors firmly believe that the bottom of this cycle is behind us. The index ranges from 0 (extreme fear) to 100 for maximum greed.

It is worth noting that the United States Bureau of Labor Statistics will release July's inflation report on Wednesday, with markets forecasting a 0.5% increase. Cryptocurrency markets also reacted positively after Federal Reserve chairman Jerome Powell failed to explain how the 5.4% year-over-year increase on the consumer price index (CPI) would recede.

Margin and futures markets show little activity from bears

Analyzing derivatives indicators can help confirm whether these positive expectations are reflected in professional traders' data. The first one is the Bitfinex margin long ratio, which drastically changes when bearish bets are made.

*Bitfinex BTC margin longs / total margin contracts. Source: Bybt*

The above chart shows that after a brief period from July 9 to July 19, Bitfinex margin longs were back at 90% or higher. However, the ratio has not seen a downturn since then, displaying a lack of confidence from bears.

Bitfinex margin traders are known for creating positions of 20,000 or higher BTC contracts in a very short time, indicating the participation of whales and large arbitrage desks.

Next, analysts should evaluate the futures market by measuring the percentage of top clients either betting on the upside (longs) or downside (shorts). Keep in mind that the outstanding amount in longs and shorts contracts are balanced at all times in futures markets.

*Bitcoin futures top traders aggregate long-to-short ratio. Source: Bybt*

Bybt consolidates futures markets data from Binance, OKEx, and Huobi top traders. The current 1.14 indicator favors longs by 14% among those exchange's largest users. Therefore, there has been a significant change over the last 12 hours because these traders were previously net short.

Both the Bitfinex margin and derivatives exchange futures markets point to a lack of confidence from bears right as Bitcoin breaks through the $45,000 resistance. This suggests that the recent 20% rally is well-founded and not simply a blip or the result of heavy liquidations.

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.

Bitcoin bulls control Friday’s $1.7B monthly options expiry

July 29, 2021 Coin Telegraph

<div>Bitcoin bulls control Friday's .7B monthly options expiry</div>

bitcoin futures

Bitcoin's surge above $40,000 boosted the bulls' advantage in this month's $1.7 billion options expiry.

On Friday, July 30, a total of 42,850 Bitcoin (BTC) option contracts ($1.7 billion) are set to expire. This might be the first time since the May 21 weekly expiry that bulls will be able to profit from the $40,000 call (buy) options.

The most recent surge in price may have been prompted by the rumor that Amazon would accept crypto payments, but after the e-commerce giant denied these rumors, BTC has held relatively steady.

According to options markets, regardless of the reason behind the recent market strength, a few incentives are in place for bulls to sustain the $40,000 level.

*Aggregate July 30 Bitcoin option open interest by strike. Source: Bybt.com*

While the initial analysis favors the neutral-to-bullish call options by 21% according to the call-to-put ratio, a decent number of those bets were placed at $45,000 and higher strikes. These options are almost worthless with less than 14 hours until maturity.

Bulls are in complete control

Bears were overconfident for the monthly expiry and 87% of the neutral-to-bearish put options have been placed at $39,000 or lower. If bears are to suppress the price below this level on July 30, a total of $105 million put options will be available.

Meanwhile, the neutral-to-bullish call options below $39,000 amount to $320 million. The net result is a $215 million advantage favoring the neutral-to-bullish call options.

Sustaining the price above $40,000 on July 30 would increase the bulls' lead by $140 million. This difference seems enough to justify a price push above that level, at least until 8:00 am UTC when Deribit expiry takes place.

July future contracts also exert some influence

Bitcoin futures expiries occur simultaneously, but unlike options, longs and shorts are evenly matched at all times.

An aggregate of $650 million in BTC futures is set to expire this Friday, but this will largely depend on the CME's $455 million because traders might close their position before the expiry, which happens on Friday at 3:00 pm UTC.

At the moment, the options market data largely favors bulls, at least for the short-term.

Bitcoin price hits $32K but derivatives metrics still show signs of weakness

July 21, 2021 Coin Telegraph

Bitcoin price hits K but derivatives metrics still show signs of weakness

bitcoin futures

Bitcoin price rallied 8.5% to recover the $32,000 level, but derivatives data shows pro traders still feel apprehensive.

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 of Bitcoin in circulation and the yearly issuance of newly mined Bitcoin.

On-chain data is positive, but derivatives indicators are not

On-chain analytics show that the monthly average of 36,000 BTC withdrawn from exchanges is usually interpreted as accumulation. However, this superficial analysis fails to acknowledge the increased use of tokenized Bitcoin in decentralized finance (DeFi) applications.

*RenBTC and Wrapped BTC aggregate supply. Source: Cointrader.pro*

The chart above shows that 40,660 BTC have been added to Wrapped Bitcoin (WBTC) and RenBTC (RENBTC) over the past three months. This number does not consider deposits at BlockFi, Nexo, Len and the multiple services that provide yield on user's cryptocurrency deposits.

Removing Bitcoin previously deposited on exchanges could be a sign that traders' intent to sell in the short term is reduced. Still, at the same time, it might also represent investors seeking higher returns in other avenues. In short, these coins might have been sitting on exchanges as collateral or as a long-term holding.

As previously mentioned, derivatives indicators flipping negative should hold more weight than assumptions on the bullish or bearish interpretation of on-chain data. In an initial analysis, analysts should review the futures contracts premium, which is also known as the basis.

This indicator allows investors to understand how bullish or bearish professional traders are because it measures the difference between monthly futures contracts and the current spot market price.

A neutral basis rate should be between 7% to 15% annualized. This price difference is caused by sellers demanding more money to postpone settlement, a situation known as contango.

*Huobi 1-month BTC futures basis. Source: Skew*

However, when this premium fades or turns negative, this is a very bearish scenario known as backwardation. July 20 was the first time that the indicator sustained a negative 2.5% level for longer than twelve hours.

At the moment, professional traders are likely leaning bearish after Bitcoin lost the critical $30,000 support, but further confirmation can be gained from looking at options markets.

Pro traders are seeking protective put options

Unlike futures contracts, there are two different instruments in options. Call options provide the buyer with upside price protection, and the put option is a right to sell Bitcoin at a fixed price in the future. Put options are generally used in neutral-to-bearish strategies.

*Bitcoin options put-to-call ratio. Source: Cryptorank.io*

Whenever the put-to-call ratio increases, it means the open interest on these neutral-to-bearish contracts is growing, and it is usually interpreted as a negative signal. The most recent data at 0.66 still favors the call options, but these instruments gradually lose ground.

Currently, there's enough evidence of bearishness in the futures and options markets, and this hasn't been the case over the past two months. This suggests that even pro traders lack confidence after the $30,000 support failed to hold in the past 48-hours.

Bank of America Launches Bitcoin Futures Trading for Select Group of Clients: Report

July 17, 2021 The Daily Hodl

Bank of America Reportedly Approves Bitcoin Futures Trading

July 16, 2021 The Crypto Briefing

bitcoin futures

The ongoing shift to layer-two solutions

Longs are heavily liquidated as BTC sells off

Possible outlier detected

Not all traders were caught off guard

Retail’s influence on Bitcoin’s price

$50,000 a psychological barrier

Holders keep 'hodling' and inflation benefits the crypto market

Margin and futures markets show little activity from bears

Bulls are in complete control

July future contracts also exert some influence

On-chain data is positive, but derivatives indicators are not

Pro traders are seeking protective put options

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