In the latest episode of Cointelegraph market report, Analyst Marcel Pechman took an in-depth look at Bitcoin’s recent drop to $26,000. Derivatives market analysis shows that Bitcoin (BTC) options and futures indicators lack signs of bearishness from professional traders, and while this does not guarantee a quick return to the $29,000 support level, it reduces the chances of a long-term correction.
Pechman showed a chart of Kaiko data on BTC liquidity and volatility, which has dropped significantly since the November 2022 FTX crash. Did the 11.4% price drop in mid-August worsen with the largest futures liquidation since November 2022, without indicating liquidity issues or heightened volatility?
After the recent $26,000 plunge, the bitcoin futures premium has stabilized at 6%, indicating a balance in demand between leveraged bulls and bears. This is consistent with a neutral -7% to 7% bias in BTC options, suggesting that downside protection is reasonably priced.
Pechman reviewed another article discussing macroeconomic analyst Lynn Alden’s views on the proposal for a common currency among the BRICS countries (Brazil, Russia, India, China and South Africa). Alden doesn’t think it’s going to work—and Pechman agrees, too. However, Alden pointed out that if the BRICS countries use their national currencies for foreign trade, the dollar will weaken, offering unconventional advice for cryptocurrency investors.
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