Be courageous while others are afraid
Be courageous while others are afraid.
Briefly put, the BTC options markets are still under pressure, which implies that professional traders are hesitant to accept downside risk. The futures premium on bitcoin has been reasonably stable, although the indication indicates that leveraged long purchasers are not particularly interested.
Even if placing a bullish wager now may appear contrarian, a sudden price increase would nonetheless catch skilled traders off guard. For Bitcoin bulls, it consequently presents an intriguing risk-reward scenario.
The author's thoughts and opinions alone, not necessarily those of Cointelegraph, are conveyed in this article.
Annualized premium for 3-month Bitcoin futures. Origin: Laevitas
The information above shows that since April 12, Bitcoin's base indicator has been below 4%. This reading is typical of negative markets, but it is positive that it has held steady since the sell-off that brought the price to $25,400 on May 12.
Traders must also examine the Bitcoin options markets in order to eliminate externalities unique to the futures instrument. Because it reveals when Bitcoin arbitrage desks and market makers are overcharging for upside or downside protection, the 25% delta skew is incredibly helpful.
The skew indicator will rise above 12% if option traders anticipate a decline in the price of bitcoin. Generalized excitement, however, exhibits a negative 12% skew.
