CryptoMediaClub
Monday, July 28, 2025
  • All news
  • Bitcoin
  • Ethereum
  • Altcoins
  • NFT
  • Blockchain
  • Analysis
No Result
View All Result
  • All news
  • Bitcoin
  • Ethereum
  • Altcoins
  • NFT
  • Blockchain
  • Analysis
No Result
View All Result
CryptoMediaClub
No Result
View All Result
Home Bitcoin

Bitcoin price holds $26K as derivatives data hints at end of volatility spike

22.08.2023
A A
0
122
VIEWS
ShareShare

In the past few months, Bitcoin traders had grown used to less volatility, but historically, it’s not uncommon for the cryptocurrency to see price swings of 10% in just two or three days. The recent 11.4% correction from $29,340 to $25,980 between Aug. 15 and Aug. 18 took many by surprise and led to the largest liquidation since the FTX collapse in November 2022. But the question remains: Was this correction significant in terms of the market structure?

Certain experts point to reduced liquidity as the reason for the recent spikes in volatility, but is this truly the case?

BTC surged 70%+ in 2023, yet the "Alameda gap" – liquidity dip post FTX and Alameda Research collapse – remains, supported by low volatility.
Read full analysis here: https://t.co/kVslgLQtpL pic.twitter.com/g8Ac7udBl7

— Kaiko (@KaikoData) August 17, 2023

As indicated by the Kaiko Data chart, the decline of 2% in the Bitcoin (BTC) order book depth has mirrored the decrease in volatility. It’s possible that market makers adjusted their algorithms to align with the prevailing market conditions.

Hence, delving into the derivatives market to assess the impact of the drop to $26,000 seems reasonable. This examination aims to determine whether whales and market makers have become bearish or if they’re demanding higher premiums for protective hedge positions.

To begin, traders should identify similar instances in the recent past, and two events stand out:

Bitcoin/USD price index, 2023. Source: TradingView

The first decline took place from March 8 to March 10, causing Bitcoin to plummet by 11.4% to $19,600, marking its lowest point in over seven weeks at that time. This correction followed the liquidation of Silvergate Bank, a crucial operational partner for multiple cryptocurrency firms.

The subsequent significant move occurred between April 19 and April 21, resulting in a 10.4% drop in Bitcoin’s price. It revisited the $27,250 level for the first time in more than three weeks after Gary Gensler, the chair of the United States Securities and Exchange Commission, addressed the House Financial Services Committee. Gensler’s statements provided little reassurance that the agency’s enforcement-driven regulatory efforts would cease.

Not every 10% Bitcoin price crash is the same

Bitcoin quarterly futures generally tend to trade with a slight premium when compared to spot markets. This reflects sellers’ inclination to receive additional compensation in return for delaying the settlement. Healthy markets usually see BTC futures contracts being traded with an annualized premium ranging from 5 to 10%. This situation, termed “contango," is not unique to the cryptocurrency domain.

Bitcoin 3-month futures premium, March/April 2023. Source: Laevitas

Leading up to the crash on March 8, Bitcoin’s futures premium was at 3.5%, indicating a moderate level of comfort. However, when Bitcoin’s price dipped below $20,000, there was an intensified sense of pessimism, causing the indicator to shift to a discount of 3.5%. This phenomenon, referred to as "backwardation," is typical of bearish market conditions.

Conversely, the correction on April 19 had minimal impact on Bitcoin's futures main metric, with the premium remaining around 3.5% as the BTC price revisited $27,250. This could imply that professional traders were either highly confident in the soundness of the market structure or were well-prepared for the 10.4% correction.

The 11.4% BTC crash between Aug. 15 and Aug. 18, reveals distinct dissimilarities from previous instances. The starting point for Bitcoin’s futures premium was higher, surpassing the 5% neutral threshold.

Bitcoin 3-month futures premium, August 2023. Source: Laevitas

Notice how rapidly the derivatives market absorbed the shock on Aug. 18. The BTC futures premium swiftly returned to a 6% neutral-to-bullish position. This suggests that the decline to $26,000 did not significantly dampen the optimism of whales and market makers regarding the cryptocurrency.

Options markets confirm lack of bearish momentum

Traders should also analyze options markets to understand whether the recent correction has caused pro traders to become more risk-averse. In short, if traders anticipate a Bitcoin price drop, the delta skew metric will rise above 7%, and phases of excitement tend to have a -7% skew.

Related: Why is the crypto market down today?

Bitcoin 30-day options 25% delta skew. Source: Laevitas

Data indicate excessive demand for call (buy) BTC options ahead of the Aug. 15 crash, with the indicator at -11%. This trend changed over the subsequent five days, though the metric remained within the neutral range and was unable to breach the 7% threshold.

Ultimately, both Bitcoin options and futures metrics reveal no signs of professional traders adopting a bearish stance. While this doesn’t necessarily guarantee a swift return of BTC to the $29,000 support level, it does reduce the likelihood of an extended price correction.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Share9Tweet6ShareSharePin2

Related Posts

Coinbase’s Astounding $100 Billion Milestone Amidst Bitcoin’s Record Surge
Bitcoin

Coinbase’s Astounding $100 Billion Milestone Amidst Bitcoin’s Record Surge

15.07.2025
0

BitcoinWorldCoinbase’s Astounding $100 Billion Milestone Amidst Bitcoin’s Record Surge The cryptocurrency world is buzzing with excitement, and for good reason!...

Read moreDetails
Bitcoin’s Unseen Ascent: Why Market Euphoria Is Still Ahead, According to Alphractal CEO

Bitcoin’s Unseen Ascent: Why Market Euphoria Is Still Ahead, According to Alphractal CEO

14.07.2025
Bitcoin Holdings Soar: The Blockchain Group’s Momentous Digital Asset Accumulation

Bitcoin Holdings Soar: The Blockchain Group’s Momentous Digital Asset Accumulation

14.07.2025
Bitcoin’s Astonishing Anomaly: Why Public Search Interest Remains Low Despite Record Highs

Bitcoin’s Astonishing Anomaly: Why Public Search Interest Remains Low Despite Record Highs

14.07.2025
Bitcoin Treasury Strategy: Unleashing Growth with The Blockchain Group’s $3.52M Boost

Bitcoin Treasury Strategy: Unleashing Growth with The Blockchain Group’s $3.52M Boost

08.07.2025
Load More
Next Post
Future Of Dogecoin Uncertain: Lead Dev Opposes Shift To Proof-Of-Stake

Future Of Dogecoin Uncertain: Lead Dev Opposes Shift To Proof-Of-Stake

0 0 votes
Рейтинг статьи
Subscribe
Notify of
guest
guest
0 комментариев
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Recommended

Nokia to Focus on Web3 in Coming Years

Nokia to Focus on Web3 in Coming Years

1 year ago
Crypto Exchange OKX Eyes Wall Street Debut After April Comeback: Report

Crypto Exchange OKX Eyes Wall Street Debut After April Comeback: Report

1 month ago
BlockFi used customer money to buy $30M insurance, creditors claim

BlockFi used customer money to buy $30M insurance, creditors claim

2 years ago

Important Update to 25 Trading Pairs on Binance

2 years ago

Categories

  • All news
  • Altcoins
  • Analysis
  • Bitcoin
  • Blockchain
  • Ethereum
  • NFT
No Result
View All Result

Highlights

South Korean Crypto Exchanges Paid Customers $87M in Interest in Past Year

Tyler Winklevoss Says JPMorgan Halted Gemini Onboarding Over Public Criticism

Ripple’s Chris Larsen Still Holds 2.58B XRP, Analyst Warns of Potential Sell Pressure

Solana Price Prediction: SOL Breaks Key Resistance – What This Means for Future Gains

Bitwise CIO Bets on Bitcoin Rally in 2026, Defying 4-Year Cycle

Ethereum Price Prediction: ETFs Log 17-Day Inflow Streak – Is a Supply Shock Coming?

Trending

ASIC Warns Australians Against Bitget’s “Unlicensed” Crypto Futures Offerings
All news

ASIC Warns Australians Against Bitget’s “Unlicensed” Crypto Futures Offerings

28.07.2025
0

The Australian regulator has issued a warning against crypto exchange Bitget for offering “unlicensed crypto futures products.”...

Crypto Lender Divine Uses Iris-Scanning World ID to Disburse 30,000 Unsecured Loans

Crypto Lender Divine Uses Iris-Scanning World ID to Disburse 30,000 Unsecured Loans

28.07.2025
Metaplanet Buys 780 More Bitcoin, Total Now Over 17,000 BTC

Metaplanet Buys 780 More Bitcoin, Total Now Over 17,000 BTC

28.07.2025
South Korean Crypto Exchanges Paid Customers $87M in Interest in Past Year

South Korean Crypto Exchanges Paid Customers $87M in Interest in Past Year

28.07.2025
Tyler Winklevoss Says JPMorgan Halted Gemini Onboarding Over Public Criticism

Tyler Winklevoss Says JPMorgan Halted Gemini Onboarding Over Public Criticism

28.07.2025
  • All news
  • Altcoins
  • Bitcoin
  • Blockchain
  • Ethereum
  • NFT
  • Analysis
Editor: cryptomediaclub.com@gmail.com
Advertising: digestmediaholding@gmail.com

Disclaimer: Information found on CryptoMediaClub is those of writers quoted. It does not represent the opinions of CryptoMediaClub on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoMediaClub covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.

© 2023 Crypto News. All Rights Reserved

No Result
View All Result
  • All news
  • Bitcoin
  • Ethereum
  • Altcoins
  • NFT
  • Blockchain
  • Analysis

Disclaimer: Information found on CryptoMediaClub is those of writers quoted. It does not represent the opinions of CryptoMediaClub on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoMediaClub covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.

© 2023 Crypto News. All Rights Reserved

wpDiscuz