Bitcoin options have held steady despite Friday's expiry which was over $ 1 billion. How predicted A week ago the event was a smoke screen. In fact, the result was the opposite of the expected crash on the CME, with open interest and volumes remaining consistent.
Last month, according to data from Skew, $ 7 billion worth of contracts expired on August 28, 2020, with open interest falling 32% in less than a week. The recovery was not yet complete, however, and the price on the spot exchanges soon fell 10% within a week of expiration.
This time the price on the spot exchanges has not yet fallen. In fact, the price of Bitcoin has increased by $ 400 since September 24th. This questionable phasing out didn't have a negative impact on the price, although the on-chain metrics continue to forecast the current Bitcoin market as bearish.
Open interest and trading volume on derivatives exchanges have not yet recovered and the bearish sentiment is evident. Will there be a full recovery to mid-August levels as there is no drop in prices on the spot exchanges?
While this may seem unlikely, it can turn out when bitcoin's supply on spot exchanges recovers. At the time of writing, inflows were at their lowest level in a month. In fact, there was a huge drop in inflows on September 26, a 59% drop – the largest drop in 99 days.
The decline in inflows will keep supply in check, but demand on the spot exchanges must increase. Bitcoin is being pulled out of wallets and demand will continue to throttle. However, the price does not react very quickly as the volatility and the volume traded are low compared to other assets in the market such as DeFi projects and Ethereum.
Over 5000 BTC was transferred to unknown wallets in three off-exchange transactions after the event ended Whale alertUpdates. While 82% of HODLers remain profitable, they have not posted any unrealized gains on exchanges. Instead, whales move funds outside of the exchanges.
Institutional holdings are down 7% to 8% since their last purchase and this seems to be missing part of the puzzle.
Despite the bearish sentiment, short positions on BitMEX result in long contracts, and the difference is almost 2.5 times.
While these inconsistencies in the bearish sentiment on the spot and derivatives exchanges could point to a rebound to mid-August levels, other factors, such as low trading volumes on both spot and derivatives exchanges, suggest the opposite. According to Willy Woo's Bitcoin Volatility Chart, the 60-day volatility is 5.55, having dropped over 50% since mid-August.
The network's volatility is low, and unless it rebounds by more than 50% in the next few weeks, the Bitcoin cash and derivatives exchanges are very unlikely to hit levels in mid-August.