[{"category":{"name":"Trending News","exported_url":"trending-news"},"id":"74f2d7df-0300-419d-987a-4262225152c6","updated_at":"2023-03-31T07:30:30.453565+00:00","account":{"firstName":"Mason","lastName":"Thompson"},"description":"The BTC options and derivatives markets appear unaffected by the CFTC's recent action targeting Binance. However, whether this is a positive or negative indicator is still being determined.","sapo":"The limited impact of the Bitcoin price correction might be attributed to the successful asset sale by Silicon Valley Bank to First Citizens BancShares at a $16.5 billion discount.","title":"Bitcoin Holds Its Price Even CFTC Case Against Binance","content":"

The BTC options and derivatives markets appear unaffected by the CFTC's recent action targeting Binance. However, whether this is a positive or negative indicator is still being determined.

Following the lawsuit against Binance and its CEO Changpeng "CZ" Zhao by the United States Commodity Futures Trading Commission on March 27, the value of Bitcoin (BTC) dropped by 3.6% from $28,680 to $26,900. So far, Binance has been investigated by the CFTC, the Securities and Exchange Commission, the Internal Revenue Service, and federal prosecutors.

The limited impact of the Bitcoin price correction might be attributed to the successful asset sale by Silicon Valley Bank to First Citizens BancShares at a $16.5 billion discount. The Federal Deposit Insurance Corporation provided an exceptional credit line for potential losses.

Oil prices surged 5% on March 27 due to heightened geopolitical tensions in Europe triggered by Russian President Vladimir Putin. According to Investing.com, Russia intends to deploy tactical nuclear weapons in Belarus, a move meant to intimidate countries that support Ukraine.

Further strain in the crypto sector emerged when a U.S. Federal Judge temporarily halted the proposed sale of Voyager Digital to Binance.US on March 27. Judge Jennifer Rearden of the U.S. District Court in New York approved the request for an emergency stay.

To better understand the current market stance of professional traders, let's analyze Bitcoin derivatives metrics.

Bitcoin Futures Remain Unaffected by the CFTC-Binance Lawsuit

Bitcoin quarterly futures are favoured by large investors and arbitrage desks, typically trading at a small premium compared to spot markets. This indicates that sellers demand higher prices to postpone settlement over an extended period.

Consequently, in a healthy market, futures contracts should trade at a 5%-10% annualized premium, a condition referred to as contango. This phenomenon is not exclusive to cryptocurrency markets.

Bitcoin analysis price chart

Despite Binance holding 33% of the $11.2 billion open interest, the news regarding the exchange had no impact on the Bitcoin futures premium. The two-month contract premium is 3.5%, below the neutral 5% threshold. If there had been panic selling using leveraged futures contracts, the indicator would have rapidly shifted to zero or even negative.

The lack of demand for leveraged long positions does not automatically signal a price drop. Therefore, traders should examine Bitcoin's options markets to understand how large investors and market makers assess the probability of future price fluctuations.

Bitcoin Options Traders Maintain a Modestly Positive Outlook

Bitcoin analysis price chart

The 25% delta skew indicates when market makers and arbitrage desks charge excessively for upside or downside protection. In bear markets, options investors assign higher probabilities to a price drop, causing the skew indicator to rise above 8%. Conversely, bullish markets tend to push the skew metric below -8%, implying that bearish put options are less in demand.

Currently, the 25% skew ratio is at -5, suggesting that the protective put options are trading at a minor discount, confirming the Binance news's insignificance. More crucially, the CFTC action did not impact the 25% skew, indicating that whales and market makers must factor in any significant changes to the market structure.

","tags":[{"tag":{"tag":"Market Overview","id_tag":"market-overview"}},{"tag":{"tag":"Market Analysis","id_tag":"market-analysis"}},{"tag":{"tag":"Bitcoin","id_tag":"bitcoin"}},{"tag":{"tag":"BTC","id_tag":"btc"}},{"tag":{"tag":"Bitcoin","id_tag":"bitcoin"}},{"tag":{"tag":"BTC","id_tag":"btc"}}],"image":{"fileName":"bitcoin-price-maintain.png"}}]

Bitcoin Holds Its Price Even CFTC Case Against Binance

Related topics

Related post