Some analysts might suggest that harsh daily corrections like the one seen today is a norm rather than an exception considering the asset’s 67% annualized volatility. Case in point, today’s intraday drop in the total market capitalization exceeded 9% in 19 days over the past 365, but some aggravants are causing this current correction to stand out.
In healthy markets, futures should trade at a 4% to 8% annualized premium, which is enough to compensate for the risks plus the cost of capital.According to the OKX and Deribit Bitcoin futures premium, the 9.7% negative swing on BTC caused investors to eliminate any optimism using derivatives instruments. When the indicator flips to the negative area, trading in"backwardation," it typically means there is much higher demand from leveraged shorts who are betting on further downside.
Unlike futures contracts, the balance between margin longs and shorts isn't necessarily matched. When the margin lending ratio is high, it indicates that the market is bullish—the opposite, a low ratio, signals that the market is bearish.Crypto traders are known for being bullish, which is understandable considering the adoption potential and fast-growing use cases like decentralized finance and the perception that certain cryptocurrencies provide protection against USD inflation.
These three derivatives metrics show traders were definitely not expecting the entire crypto market to correct as sharply as today, nor for the total market capitalization to retest the $1 trillion support. This renewed loss of confidence might cause bulls to further reduce their leverage positions and possibly trigger new lows in the coming weeks..
Not surprising at all. It's time for stablecoins
It could be but definitely not for iExec $RLC hodlers. With the EthereumMerge coming and the necessary drift already in place especially towards Web3 and NFTs, you can be rest assured that the dip won't be a thing to worry about.
It could be better than we think
bitcoin to Zero again
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