Bitcoin On-Chain Analysis; an overview of 13/06/22–17/06/22

Bitcoin has experienced one of its further deviations below its 200-day trend in history, the third-lowest in the last 10 years. Strong likelihood of oversold conditions which means reversion.

Bitcoin sits below its 4-year trend for just the 3rd time ever.

Bitcoin sits below its 200-week moving average for the second time ever.

Bitcoin’s price sits at the lower bound of its production cost for the first time since the March 2020 liquidity crisis as well.

Bitcoin’s market price finally sits below its realized price. Realised cap multiplies the supply of BTC and the price each coin was last moved, therefore realized price is the average price investors have paid for their coins.

Being below this value (green accumulation zone) means in aggregate market participants are underwater.

Reserve risk, is showing one of its lowest readings.

Derivatives:

A large decline in the 3M futures basis across the board, including briefly reaching backwardation on several venues including FTX and Okex.

Down to just over 10 billion, futures open interest in USD has reached its lowest since December 2020.

We have started to see some negative funding rates across the board at all venues but would like to carve out a longer regime to allow for a broader trend reversal.

Options implied volatility had driven dramatically as active managers and market makers seek to hedge their positions; just shy of the levels reached in mid-May 2021.

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