The price of Bitcoin rose by $28000 on March 21, but traders were not particularly jubilant after a 36% increase in eight days, according to two derivatives indicators. Apart from the excellent performance of Bitcoin, investors are not confident enough about the further rise in the price of Bitcoin: the recent qflp of Credit Suisse, the 167-year-old German-Swiss financial leader, confirmed that the plight of commercial banks around the world is probably not over at this stage.
On March 19, the German and Swiss government announced that UBS had agreed to use an "emergency bailout" to recover its competitor Credit Suisse to prevent further market unrest among commercial banks around the world. The deal is likely to benefit from more than $280 billion applied by countries and central banks, which is equivalent to 1/3 of Germany's Swiss GDP. Unfortunately, there is no way to describe the agreement as a reassuring agreement or a symbol of the overall strength of financial companies, including the central bank.
The same is true of the core points of emergency bank credit provided by the US Treasury to protect commercial banks and increase FDIC risk reserves. The launch of the term Deposit financing Program (BTFP) on March 12th meant the introduction of liquidity repair at the Fed meeting, reversing the gradual trend of June 2022, when the Fed meeting gradually sold property every month.
The plight of commercial banks around the world promotes the Fed meeting to abandon the current policy of inflation manipulation.
With $300 billion in emergency assets given to banks, the Fed meeting completely reversed its anti-inflation strategy. Since June 2021, inflation has been more than 5%, with a target of 2%. The idea, known as tightening, includes raising interest rates to reduce the $480 million of assets accumulated at Fed meetings between March 2020 and April 2022.
On March 20, the credit rating of the first Republican Financial institutions (FRB) was further downgraded to scrap by S & P global companies, adding to the pressure on foreign regional financial institutions. According to the risk group, the financial institution's recent introduction of $30 billion in deposits from 11 large banks is likely to fail to deal with the liquidity problems of FRB.
Investors in digital currencies have always expected to be linked to traditional markets. Even so, there is little reason to equip at this stage, especially if it comes from a company, a co-private equity manager or a wealthy investor. Historically, investors have focused on accumulating cash trading positions or short-term government debt instruments during a recession to maintain overall operations and may be used to buy cheap sources.
The yield on six-month foreign bonds, for example, has fallen from 5.33% on March 9 to 4.80% on March 20. As investors lay the groundwork for the impact of inflation, economic downturn or both, this trend indicates an increase in demand for the use of tools in the short term. The change since March 9 has reversed all the market since 2023, and the index closed at 4.77% in 2022.
Let's take a look at bitcoin derivatives indicators to confirm the market influence of technical professional traders at this stage.
Balance of demand for long and short positions in Bitcoin derivatives
Bitcoin first-quarter futures trading is very popular among sharks and arbitrage units, which generally trade at a slight equity premium to the spot market, suggesting that merchants require a large number of assets to delay liquidation for longer.
As a result, stock index futures contracts in the physical and mental health market need to be traded at a daily chemical premium of 5% to 10%-a thing called futures premium, which is not unique to the password market.
Since March 15, the BTC futures premium index has remained unchanged at 2.2%, indicating that there is no additional demand for financial leverage theme activities. A number less than 5% indicates anxiety, which is not what many people expected after a 36% price increase within 8 days.
The lack of demand for both ends of financial leverage does not necessarily mean prices are falling. Therefore, traders should investigate the Bitcoin stock index futures market to understand how dolphins and market makers judge the probability of future price adjustments.
The 25% increase error is a significant sign that market makers and hedging arbitrage institutions maintain prices too high for rising or falling prices. In a bear market, investors in stock index futures feel more likely that prices will fall, causing the skew index to rise above 8%. On the other hand, rising markets usually lower their skewness to less than-8%, which means there is less demand for bullish put options.
The Delta skew broke the neutral-8 per cent entry threshold on March 19th, indicating that the market has a relatively high demand for neutral to rising put options, showing a moderately cheerful nature. However, this kind of excitement has not been going on for a long time, as the 25% deflection index is currently at-8%, which is the edge of an equilibrium situation. Even so, this is a far cry from the previous week, when the slope reached 12% on March 13.
In the final analysis, techno-professional bitcoin traders are not bullish on bitcoin worth more than $26000. This is not necessarily a mistake, but unless data encryption investors get back on their feet, the chances of such digital currencies rising by $30,000 are still close to zero. The financial system could collapse instantly, causing investors to flee to safety rather than looking for risk.
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