Bybit expands spot USDC trading pairs as support for stablecoins grows

August 31, 2022 Coin Telegraph

Circle

The crypto derivatives exchange has partnered with Circle to expand its suite of USDC offerings; traders will also have access to auto conversions between the stablecoin and U.S. dollars.

Crypto derivatives exchange Bybit has partnered with stablecoin issuer Circle Internet Financial to expand its suite of spot trading pairs denominated in USD Coin (USDC) — a move the company says will increase retail and institutional access to USDC-settled products.

Under the partnership agreement, Bybit will expand its USDC spot pairs to include several additional cryptocurrencies and make auto conversions between the United States dollar and USDC available, the company disclosed Wednesday. Bybit said it intends to collaborate with Circle on other initiatives to boost stablecoin and crypto adoption.

Currently, Bybit supports around 35 USDC spot pairs, according to a Circle representative.

A major U.S. investment bank eyes the crypto derivatives market.

Goldman Sachs is reportedly trying to onboard some of its derivatives products into @FTX_Official crypto derivatives offerings. https://t.co/c0467Knv9U

(Reporting via @_prashantjha)
— Cointelegraph (@Cointelegraph) June 1, 2022

Bybit began offering USDC options and perpetual contracts in April of this year, giving traders more ways to hedge against movements in the spot market. At the time, Bybit CEO Ben Zhou told Cointelegraph that the options rollout was in response to growing user demand. On Wednesday, Zhou said the launch of USDC options had been a success and that Bybit was looking to “further develop our working relationship with Circle.”

In addition to USDC options, Bybit plans to make Ether (ETH) and Solana (SOL) options available to traders soon.

Circle’s USDC is the world’s second-largest stablecoin with a market capitalization of $52.3 billion, according to CoinMarketCap. Only Tether’s USDT commands more market penetration with a $67.6 billion market cap.

Circle released a full breakdown of its USDC reserves in July for the period ending June 30, 2022. At the time, about 75.6% of its backing was in short-term U.S. Treasury bills. The remainder of its position was in cash deposits at domestic banks.

Hawkish Fed comments and Bitcoin derivatives data point to further BTC downside

August 26, 2022 Coin Telegraph

Coin Telegraph

BTC and stocks sold-off after comments from the Federal Reserve re-emphasized the Fed’s commitment to lowering high inflation in the United States.

A $750 pump on Aug. 26 took Bitcoin (BTC) from $21,120 to $21,870 in less than two hours. However, the movement was completely erased after comments from U.S. Federal Reserve Chair Jerome Powell reiterated the bank’s commitment to contain inflation by tightening the economy. Following Powell’s speech, BTC price dropped as low as $20,700.

*Bitcoin/USD 30-min price. Source: TradingView*

At Jackson Hole, Powell specifically mentioned that "the historical record cautions strongly against prematurely loosening policy." Right after those remarks, the U.S. stock market indexes reacted negatively, with the S&P 500 dropping 2.2% within the hour.

On the Bitcoin chart, the affable “Bart candle,” a reference to the shape of Bart Simpson’s head, and a descriptor of BTC’s up and down price action, surfaced. Outside of these unpredictable technical analysis indicators, there are other indicators that pointed to Bitcon’s broader neutral-to-bearish sentiment.

Regulators up the pace on crypto legislation

Newsflow for cryptocurrencies has been negative for quite some time and this is also weighing on investor sentiment. On Aug. 24, the U.S. Federal Deposit Insurance Corporation (FDIC) issued cease and desist letters to five companies for allegedly making false representations about deposit insurance related to cryptocurrencies, including FTX US.

On Aug. 25, India-based crypto exchange CoinSwitch had its premises searched by Anti-Money Laundering agents over alleged violations of forex laws. Launched in India in 2020, CoinSwitch successfully raised capital from Coinbase Ventures, Andreessen Horowitz, Sequoia and Tiger Global.

Lastly, on Aug. 26, the U.S. Securities and Exchange Commission postponed a decision for a Bitcoin spot exchange-traded fund (ETF) by global investment firm VanEck. Even though the approval odds were remote, it reinforced the anti-crypto sentiment from the regulator.

Consequently, crypto investors are faced with lingering uncertainty despite the seemingly helpful inflationary scenario, which should favor supply capped assets. For this reason, analyzing crypto derivatives is essential to understanding whether investors have been pricing higher odds of a downturn.

Pro traders were neutral-to-bearish ahead of the dump

Retail traders usually avoid quarterly futures due to their price difference from spot markets. Still, they are professional traders' preferred instruments because they prevent the perpetual fluctuation of funding rates that often occurs in a contract.

Bitcoin 3-month futures annualized premium. Source: Laevitas

In healthy markets, the indicator should trade at a 4% to 8% annualized premium to cover costs and associated risks. Yet, that has not been the case because the Bitcoin futures premium remained below 1.8% the entire time. This data reflects professional traders' unwillingness to add leveraged long (bull) positions.

One must also analyze the Bitcoin options markets to exclude externalities specific to the futures instrument. For example, the 25% delta skew is a telling sign when market makers and arbitrage desks are overcharging for upside or downside protection.

Bitcoin 30-day options 25% delta skew: Source: Laevitas

In bear markets, options investors give higher odds for a price dump, causing the skew indicator to rise above 12%. The 30-day delta skew had been ranging near the neutral-to-bearish threshold since Aug. 22, signaling options traders were less inclined to offer downside protection.

These two derivatives metrics suggest that the Bitcoin price dump on Aug. 26 might have followed the traditional stock market performance, but crypto traders were definitely not expecting a positive move.

Derivatives data leaves no room for bullish interpretations because the sentiment worsened after Powell’s comments and they further indicate weakening market conditions.

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.

Wen moon? Probably not soon: Why Bitcoin traders should make friends with the trend

August 25, 2022 Coin Telegraph

Bitcoin Price

Recurring bear flags and the Fed’s telegraphed monetary policy are painting a roadmap for BTC’s future price action.

The impact of Federal Reserve policy and Bitcoin’s higher timeframe market structure suggest that BTC price is not yet ready for a trend reversal.

Bitcoin (BTC) price continues to chop below the $22,000 level and the wider narrative among traders and the mainstream media suggests that a risk-off sentiment is a dominant perspective ahead of this week’s Jackson Hole summit.

Over the three-day symposium, the Federal Reserve is expected to clarify its perspective on inflation, interest rate hikes and the overall health of the United States economy.

In the meantime, traders on Crypto Twitter continue to fantisize about a “Fed pivot” where interest hikes will be curtailed below 0.25 basis points and some form of monetary easing re-emerges, but the likelihood of the Fed adopting a dovish point-of-view in the short-term seems unrealistic, given the central bank’s 2% inflation target.

Regarding Bitcoin’s most recent price action, an old saying among traders is:

“Fade the short-term trend in favor of the long-term trend.”

From a bird’s-eye-view, BTC price is in a clear downtrend with a four-month long stretch of recurring bear flags that continue to see continuation.

The power of the hammer. pic.twitter.com/ayxELfsBdz
— il Capo Of Crypto (@CryptoCapo_) August 23, 2022

Sure, the on-chain data hints that maybe price is at a bottom.

Of course, aggregate volumes and certain on-chain data looking at whale and shrimp BTC addresses may point toward accumulation.

Yeah, the open interest in BTC and Ether continues to reach record highs and this adds fuel to the bullish ETH Merge and ETH proof-of-work hard fork tokens narrative triggering a juicy short squeeze on BTC and ETH.

Any of those things can happen, but beware the narrator of those hopium-infused dreams and remember that the trend is always a good friend that a trader can lean on.

As unpleasant as it might sound, the trend is down. Bitcoin continues to meet resistance at its long-term descending trendline and the price has failed to secure resistance at key moving averages like the 20, 50 and 200-day MA.

*BTC/USDT daily chart. Source: Tradingview*

Each price drop is simply creating a flag-pole, and the ensuing “consolidation” creates the flag of the bear flag continuation pattern. As the pink boxes on the daily chart shows, BTC price simply trades within a defined range before breaking below it into underlying liquidity shown by the volume profile visible range and liquidity maps.

$BTC Aggregated Optical opti example from yesterday

How to read liq maps:https://t.co/EaeFkgiggg

Join the conversation:https://t.co/Ac5ChFuNNl pic.twitter.com/nhVMv9suMH
— TheKingfisher (@kingfisher_btc) August 24, 2022

Essentially, there’s “nothing to see here” until price paints a few daily candles that reflect higher highs, i.e., BTC needs to clear $25,000 and close that volume profile gap in the $25,000 to $29,000 zone.

From there, one would either want to see consolidation within that new higher range, or continuation of a trend reversal where the 20-MA and 50-MA function as support. As mentioned earlier, of course there are a ton of other data points that make a strong case for why the current price range is a buy zone, but what may be true for one trader is not necessarily the case for all.

Some investors can afford to open swing longs here and lower and ride it out because they are flush and that’s part of their plan. Others have a smaller purse and can’t afford the lost opportunity cost of being locked into a red position for months on end. Traders are always encouraged to do their own research, make their own thesis and manage risk in a way that is best for their situation.

Jackson Hole is coming up and the Fed needs to continue rate hikes until inflation and other metrics are under control. Equities markets remain tightly correlated with Bitcoin price, so the tell will be whether or not SPX and DJI continue to steamroll higher, or if future actions from the Federal Reserve begin to put a damper on the recent bullish momentum.

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.

Monthly Ethereum options data suggests $2K will remain an elusive target

August 24, 2022 Coin Telegraph

Monthly Ethereum options data suggests K will remain an elusive target

Coin Telegraph

On August 26, $1.27 billion in ETH options expire and data signals that the price is likely to stay pinned under $2,000 until the Merge.

Since failing to close above the $2,000 mark, Ether (ETH) price has faced a steep 16.8% correction, but this was not enough to give bears an edge in the August $1.27 billion monthly options expiry.

*Ether USD price index, 12-hour chart. Source: TradingView*

Currently, there are mixed feelings about the network’s upcoming change to a proof-of-stake (PoS) consensus network and analysts like @DWhitmanBTC believe the potential benefits of PoS do not supersede the absence of a supply cap and multiple changes in the monetary policy over time.

uLtRaSoUnD mOnEy

Is #Ethereum even money?

If so, what’s the supply limit? What’s the monetary policy?

How can anyone trust that it won’t be changed?
— Dick Whitmanaut ∞/21M (@DWhitmanBTC) August 24, 2022

Regardless of the long-term impact, Ether price was positively impacted by the tentative Merge migration date announcement from a July 14 Ethereum developers call . Influencer and technical analyst Crypto Rover said that Ether would "drop so hard on the Merge day," as a result of traders unwinding their positions.

I think #Ethereum will drop so hard on the Merge day.

The whole anticipation is getting not bought up on the spot market but on the futures market.

Be warned.
— Crypto Rover (@rovercrc) August 23, 2022

One thing is for sure, leveraged Ether buyers were not expecting the steep correction on Aug. 18 and data from Coinglass shows the move liquidated $208 million at derivatives exchanges.

Bears placed their bets below $1,600

The open interest for Ether's July monthly options expiry is $1.27 billion, but the actual figure will be lower since bears were overly-optimistic after ETH traded below $1,600 between Aug. 20 and 22. Breaking above that resistance surprised bears because only 17% of the put (sell) options for Aug. 26 have been placed above that price level.

*Ether options aggregate open interest for Aug. 26. Source: Coinglass*

The 1.18 call-to-put ratio shows the dominance of the $685 million call (buy) open interest against the $585 million put (sell) options. Nevertheless, as Ether stands near $1,650, most of these bearish bets will become worthless.

If Ether's price remains above $1,600 at 8:00 am UTC on Aug. 26, only $95 million put (sell) options will be available. This difference happens because a right to sell Ether at $1,600 or lower is worthless if Ether trades above that level on expiry.

Bulls completely dominate the August expiry

Below are the three most likely scenarios based on the current price action. The number of options contracts available on Aug. 26 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Between $1,500 and $1,600: 108,200 calls vs. 103,900 puts. The net result is balanced between bulls and bears.
Between $1,600 and $1,700: 45,900 calls vs. 90,000 puts. The net result favors the call (bull) instruments by $150 million.
Between $1,700 and $1,800: 192,700 calls vs. 26,000 puts. Bulls' advantage increases to $290 million.

This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.

For example, a trader could have sold a put option, effectively gaining positive exposure to Ether above a specific price, but unfortunately, there's no easy way to estimate this effect.

Bears could avoid a $150 million loss

Ether bulls need to sustain the price above $1,600 on Aug. 26 to secure a $150 million profit. On the other hand, the bears' best-case scenario requires a push below $1,600 to balance the scales and call it a draw.

Considering the brutal $270 million leverage long (buy) positions liquidated on Aug. 18 and 19, bulls should have less margin to pressure ETH price higher. With that said, bulls are unlikely to have the means to drive ETH above $1,700 ahead of the August monthly options expiry.

Here’s why holding $20.8K will be critical in this week’s $1B Bitcoin options expiry

August 23, 2022 Coin Telegraph

Here’s why holding .8K will be critical in this week’s B Bitcoin options expiry

China

BTC bulls were liquidated in last week’s drop to $20,800, meaning even more downside could occur if this level fails ahead of this week’s $1 billion options expiry.

Bitcoin (BTC) experienced a 16.5% correction between Aug. 15 and Aug. 19 as it tested the $20,800 support. While the drop is startling, in reality a $4,050 price difference is relatively insignificant, especially when one accounts for Bitcoin's 72% annualized volatility.

Currently, the S&P 500’s volatility stands at 31%, which is significantly lower, yet the index traded down 9.1% between June 8 and June 13. So, comparatively speaking, the index of major U.S. listed companies faced a more abrupt movement adjusted for the historical risk metric.

At the start of this week, crypto investors' sentiment worsened after weaker conditions in Chinese real estate markets forced the central bank to reduce its five-year loan prime rate on Aug. 21. Moreover, a Goldman Sachs investment bank strategist stated that inflationary pressure would force the U.S. Federal Reserve to further tighten the economy, which negatively impacts the S&P 500.

Regardless of the correlation between stocks and Bitcoin, which is currently running at 80/100, investors tend to seek shelter in the U.S. dollar and inflation-protected bonds when they fear a crisis or market crash. This movement is known as a "flight to quality" and tends to add selling pressure on all risk markets, including cryptocurrencies.

Despite the bears' best efforts, Bitcoin has not been able to break below the $20,800 support. This movement explains why the $1 billion Bitcoin monthly options expiry on Aug. 26 could benefit bulls despite the recent 16.5% loss in 5 days.

Most bullish bets are above $22,000

Bitcoin's steep correction after failing to break the $25,000 resistance on Aug. 15 surprised bulls because only 12% of the call (buy) options for the monthly expiry have been placed above $22,000. Thus, Bitcoin bears are better positioned even though they placed fewer bets.

*Bitcoin options aggregate open interest for Aug. 26. Source: CoinGlass*

A broader view using the 1.25 call-to-put ratio shows more bullish bets because the call (buy) open interest stands at $560 million against the $450 million put (sell) options. Nevertheless, as Bitcoin currently stands below $22,000, most bullish bets will likely become worthless.

For instance, if Bitcoin's price remains below $22,000 at 8:00 am UTC on Aug. 26, only $34 million worth of these put (sell) options will be available. This difference happens because there is no use in the right to sell Bitcoin below $22,000 if it trades above that level on expiry.

Bulls could secure a $160 million profit

Below are the four most likely scenarios based on the current price action. The number of options contracts available on Aug. 26 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Between $20,000 and $21,000: 1,100 calls vs. 8,200 puts. The net result favors bears by $140 million.
Between $21,000 and $22,000: 1,600 calls vs. 6,350 puts. The net result favors bears by $100 million.
Between $22,000 and $24,000: 5,000 calls vs. 4,700 puts. The net result is balanced between bulls and bears.
Between $24,000 and $25,000: 7,700 calls vs. 1,000 puts. The net result favors bulls by $160 million.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

Holding $20,800 is critical, especially after bulls were liquidated in futures market

Bitcoin bulls need to push the price above $22,000 on Aug. 26 to balance the scales and avoid a potential $140 million loss. However, Bitcoin bulls had $210 million worth of leverage long futures positions liquidated on Aug. 18, so they are less inclined to push the price higher in the short term.

With that said, the most probable scenario for Aug. 26 is the $22,000 to $24,000 range providing a balanced outcome between bulls and bears.

If bears show some strength and BTC loses the critical $20,800 support, the $140 million loss in the monthly expiry will be the least of their problems. In addition, the move would invalidate the previous $20,800 low on July 26, effectively breaking a 7-week-long ascending trend.

Options data shows Bitcoin’s short-term uptrend is at risk if BTC falls below $23K

August 18, 2022 Coin Telegraph

Options data shows Bitcoin’s short-term uptrend is at risk if BTC falls below K

Coin Telegraph

BTC’s $335 million options expiry has become a death trap for bulls, and increased legal action by the SEC and IRS against crypto companies is adding to the sell pressure.

Bitcoin (BTC) briefly broke above $25,000 on Aug. 15, but the excitement lasted less than an hour and was followed by a 5% retrace in the next five hours. The resistance level proved to be tougher than expected but may have given bulls false hope for the upcoming $335 million weekly options expiry.

Investors’ fleeting optimism reverted to a sellers' market on Aug. 17 after BTC dumped and tested the $23,300 support. The negative move took place hours before the release of the Federal Open Markets Committee (FOMC) minutes from its July meeting. Investors expect some insights on whether the Federal Reserve will continue raising interest rates.

The negative newsflow accelerated on Aug. 16 after a federal court in the United States authorized the U.S. Internal Revenue Service (IRS) to force cryptocurrency broker SFOX to reveal the transactions and identities of customers who are U.S. taxpayers . The same strategy was used to obtain information from Circle, Coinbase and Kraken between 2018 and 2021.

This movement explains why betting on Bitcoin price above $25,000 on Aug. 19 seemed like a sure thing a couple of days ago, and this would have incentivized bullish bets.

Bears didn't expect BTC to move above $24,000

The open interest for the Aug. 19 options expiry is $335 million, but the actual figure will be lower since bears were overly-optimistic. These traders might have been fooled by the short-lived dump to $22,700 on Aug. 10 because their bets for Aug's options expiry extend down to $15,000.

*Bitcoin options aggregate open interest for Aug. 19. Source: Coinglass*

The 1.29 call-to-put ratio shows the difference between the $188 million call (buy) open interest and the $147 million put (sell) options. Currently, Bitcoin stands near $23,300, meaning most bullish bets are likely to become worthless.

If Bitcoin's price moves below $23,000 at 8:00 am UTC on Aug. 19, only $1 million worth of these call (buy) options will be available. This difference happens because a right to buy Bitcoin at $23,000 is useless if BTC trades below that level on expiry.

There’s still hope for bulls, but $25,000 seems distant

Below are the three most likely scenarios based on the current price action. The number of options contracts available on Aug. 19 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Between $21,000 and $23,000: 30 calls vs. 2,770 puts. The net result favors the put (bear) instruments by $60 million.
Between $23,000 and $25,000: 940 calls vs. 1,360 puts. The net result is balanced between bulls and bears.
Between $25,000 and $26,000: 3,330 calls vs. 100 puts. The net result favors the call (bull) instruments by $80 million.

For example, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price, but unfortunately, there's no easy way to estimate this effect.

Bears will try to pin Bitcoin below $23,000

Bitcoin bulls need to push the price above $25,000 on Aug. 19 to profit $80 million. On the other hand, the bears’ best case scenario requires pressure below $23,000 to maximize their gains.

Bitcoin bulls just had $144 million in leveraged futures long positions liquidated on Aug. 16, so they should have less margin to drive the price higher. With this said, bears have the upper hand to suppress BTC below $23,000 ahead of the Aug. 19 options expiry.

3 strategies investors might use to trade the upcoming Ethereum Merge

August 17, 2022 Coin Telegraph

Coin Telegraph

Investors have been crafting their strategies for navigating the volatility that could arise as the Ethereum Merge takes place. Here are a few to consider.

The Ethereum network’s long-awaited transition from proof-of-work to proof-of-stake is set to occur from Sept 15 to 16 and for the last year, traders and analysts have been discussing various outcomes for the upgrade and possible trading strategies.

Let’s take a look at three options investors and traders have.

Hodl ETH to earn the expected “hardfork” token

The first strategy is relatively simple. Traders can simply buy Ether (ETH) in the spot market and hold it in their exchange wallet, or whatever platform/wallet will support forked tokens, and wait for the expected PoW token.

Way back in 2017, when Bitcoin was forked to Bitcoin Cash, BTC holders received an equal amount of BCH, which at one point traded for $1,650 per token. At the height of the 2021 bull market, BCH rallied as high as $800.

If PoW tokens from those entities that choose to ignore the Merge happens, then finding exchanges that support the hardforks would be the place to sell them. Don’t forget to pay your taxes if your country obligates you to do so.

Once people understand that speed to market is irrelevant in the face of centralization, censorship and custodians, it will be too late.

Protocol level censorship is coming. More custodians are coming.

How much power do you think the US has over a publicly traded company?

ETH pic.twitter.com/SywlcnZ0tC
— $nadjritzcalod (@nadjritzcalod) August 16, 2022

There’s also a possibility that ETH PoW tokens won’t immediately pump and dump. Many analysts are sounding off about the risk of centralization to a PoS Ethereum network, and while it may sound far-fetched, a miner-led PoW ETH fork could gain ground, assuming projects and developers are willing to build DApps on the blockchain.

Long ETH, short futures

Let’s say you’re a tad bit skeptical about whether Ethereum will successfully pull off the Merge. A lot of people are. And after this hellacious year where Bitcoin (BTC) lost all of its yearly gains, Wonderland Money collapsed and Terra Luna, Celsius and Three Arrows Capital rugged everyone, it's perfectly natural to be nervous about a fundamental change in the market’s second largest asset.

Hedging is the option for investors who feel 50/50 about the Merge. Basically, one would be long Ether, which many holders naturally are and have been for years, or at least from the recent $880 “bottom.”

While long Ether, holding a short position in futures or options contracts allows one to protect against losses if ETH corrects sharply and hopefully obtaining the PoW hardfork tokens, which should further cancel out losses on the spot position.

The hope of making up some of those “losses” from gaining the unconfirmed PoW tokens could help skittish Merge traders sleep better at night and perhaps wrap things up in profit.

Stay in stablecoins and just trade the trend

For some investors, the risk of attempting to trade the Merge outweighs the reward and obtaining the “free” PoW hardfork tokens might not be a priority.

These investors might consider just staying in stablecoins and trading direction, or the strongest trend presented by Ether. In this scenario, one would either trade daily breakouts and breakdowns or whichever way the short-term trend dictates. Many traders anticipate the Merge to be a buy the rumor, sell the news-type event and others expect price to dump considerably after the Merge is complete.

If this is your perspective, then crafting and executing a strategy around this anticipated volatility is relatively simple if one is sitting in stables. These traders could then purchase post-dip ETH if they’re true believers and if the various PoW tokens put up heavy volumes on exchanges, the price swings in hardfork tokens could also be played.

Bitcoin traders anticipate new yearly lows after BTC’s $25K rejection — Data disagrees

August 16, 2022 Coin Telegraph

Bitcoin traders anticipate new yearly lows after BTC’s K rejection — Data disagrees

Coin Telegraph

Should traders expect further downside after BTC failed to hold above $25,000?

Bitcoin (BTC) showed weakness on Aug. 15, posting a 5% loss after testing the $25,000 resistance. The move liquidated over $150 million worth of leverage long positions and has led some traders to predict a move back toward the yearly low in the $18,000 range.

The price action coincided with worsening conditions for tech stocks, including Chinese giant Tencent, which is expected to post its first-ever quarterly revenue decline. According to analysts, the Chinese gaming and social media conglomerate is expected to post quarterly earnings around $19.5 billion, which is 4% lower than the previous year.

Moreover, on Aug. 16, Citi investment bank slashed Zoom Video Communications (ZM) recommendation to sell, adding that the stock is "high risk." Analysts explained that a challenging post-COVID dynamic, plus additional competition from Microsoft Teams, potentially caused a 20% drop in ZM shares.

The overall bearish sentiment continues to plague crypto investors, a movement described by influencer and trader @ChrisBTCbull, who mentioned that a simple rejection at $25,000 caused traders to post sub-$17,000 targets.

After #Bitcoin didn't break price through $25000, all CT started writing about the price again $16k-17k

I think it's time to open long#trading
— Chris (@ChrisBTCbull) August 16, 2022

Margin traders remain bullish despite the $25,000 rejection

Monitoring margin and options markets provides excellent insights into understanding how professional traders are positioned. For instance, a negative read would happen if whales and market makers reduced their exposure as BTC approached the $25,000 resistance.

Margin trading allows investors to borrow cryptocurrency to leverage their trading position, increasing returns. For example, one can increase exposure by borrowing stablecoins to buy an additional Bitcoin position.

On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. Unlike futures contracts, the balance between margin longs and shorts isn't always matched.

*OKX USDT/BTC margin lending ratio. Source: OKX*

The above chart shows that OKX traders' margin lending ratio has remained relatively stable near 14 while Bitcoin price jumped 6.3% in two days only to be rejected after hitting the $25,200 resistance.

Furthermore, the metric remains bullish by favoring stablecoin borrowing by a wide margin. As a result, pro traders have been holding their bullish positions, and no additional bearish margin trades emerged as Bitcoin retraced 5.5% on Aug. 16.

Option markets hold a neutral stance

There’s uncertainty about whether Bitcoin will make another run toward the $25,000 resistance but the 25% delta skew is a telling sign whenever arbitrage desks and market makers overcharge for upside or downside protection.

The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.

The skew indicator will move above 10% if traders fear a Bitcoin price crash. On the other hand, generalized excitement reflects a negative 10% skew.

*Bitcoin 30-day options show 25% delta skew: Source: Laevitas.ch*

As displayed above, the 25% delta skew has barely moved since Aug. 11, oscillating between 5% and 7% most of the time. This range is considered neutral because options traders are pricing a similar risk of unexpected pumps or dumps.

If pro traders entered a "fear" sentiment, this metric would have moved above 10%, reflecting a lack of interest in offering downside protection.

Despite the neutral Bitcoin options indicator, the OKX margin lending rate showed whales and market makers maintaining their bullish bets after a 5.5% BTC price decline on Aug. 16. For this reason, investors should expect another retest of the $25,000 resistance as soon as the global macroeconomic conditions improve.

CFTC Reportedly Approving Over-the-Counter Crypto Derivatives Trading Products From SBI Group-Supported Platform

August 11, 2022 The Daily Hodl

SBI Group reports investee getting CFTC approval for OTC derivatives trading in US

August 10, 2022 Coin Telegraph

CFTC

Under the U.S. Commodity Exchange Act and CFTC regulations, derivatives exchanges must have approval to operate as a Designated Contract Market or a Swap Execution Facility.

The United States subsidiary of electronic trading platform developer Clear Markets has reportedly received approval from the Commodity Futures Trading Commission, or CFTC, to offer over-the-counter crypto derivatives products with physical settlement.

In a Tuesday notice, SBI Holdings — a stakeholder of Clear Markets — said the CFTC had approved the U.S. subsidiary operating a Swap Execution Facility, in which it plans to offer derivatives trading for U.S. dollar and Bitcoin (BTC) pairs. The Japan-based financial services company said its market maker planned to expand its trading partners in the United States following pilot transactions on Clear Markets.

SBI Holdings announced it had acquired a 12% stake in Clear Markets in August 2018, which it planned to increase in the future. At the time, the Japanese firm said the investment was aimed at creating a crypto derivatives trading platform catered toward institutional investors.

Under the Commodity Exchange Act and related CFTC regulations, derivatives exchanges — whether dealing with crypto or other assets — must have approval to operate as a Designated Contract Market or a Swap Execution Facility in the United States. According to the Fiscal Year 2023 budget request released in March, the CFTC was considering expanding its authority over financial products using crypto.

In May, a federal court ordered three co-founders of BitMEX to pay $30 million in civil monetary penalties for allegedly violating the CFTC’s conditions. Major investment bank Goldman Sachs has also reportedly been looking into breaking into crypto derivatives products through the U.S. subsidiary of cryptocurrency exchange FTX.

Cointelegraph reached out to the CFTC and Clear Markets, but did not receive a response at the time of publication.

derivatives

Regulators up the pace on crypto legislation

Pro traders were neutral-to-bearish ahead of the dump

Bears placed their bets below $1,600

Bulls completely dominate the August expiry

Bears could avoid a $150 million loss

Most bullish bets are above $22,000

Bulls could secure a $160 million profit

Holding $20,800 is critical, especially after bulls were liquidated in futures market

Bears didn't expect BTC to move above $24,000

There’s still hope for bulls, but $25,000 seems distant

Bears will try to pin Bitcoin below $23,000

Hodl ETH to earn the expected “hardfork” token

Long ETH, short futures

Stay in stablecoins and just trade the trend

Margin traders remain bullish despite the $25,000 rejection

Option markets hold a neutral stance

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