These Two Bitcoin Indicators Offer Light in a Gloomy Marke

Bitcoin {{BTC}} had a terrible August, falling more than 13% in the first five days to $50,000 due to a variety of factors, including the end of yen carry and concerns about the U.S. economy.

Still, market participants can take heart from at least two indicators, the first of which is linked to bitcoin options listed on leading exchange Deribit.

Long-term options trend remains bullish

Despite the market decline, Bitcoin’s 180-day call-ask curve remains flat above 3, suggesting a trend toward price strengthening over the past six months, according to data tracked by Amberdata.

A call option gives the holder the right, but not the obligation, to buy the underlying asset at a specified price at a later date and represents a bullish bet on the market. A put represents a bearish bet. Option skew measures investors’ willingness to pay for an asymmetric bullish or bearish payoff. Positive values ​​indicate relatively stronger demand for bullish or call options.

BTC’s six-month call-put curve. (Amberdata)

The long-term bullish pricing aligns with some observers’ view that Bitcoin will regain value once the initial shock from global market volatility dissipates.

“The slowdown in the US clearly looks set to continue and the Fed, which is behind the curve, will need to cut rates more aggressively than previously expected. [Treasury] “yields and the dollar are priced lower as a result, which is quite optimistic for bitcoin. Moreover, with the dollar weakening as China increases its stimulus and liquidity injections, global liquidity conditions are expected to accelerate,” the founders of newsletter service LondonCryptoClub said in a presser on Monday.

“Bitcoin seems to us to be the most obvious trade for a Fed that is behind the curve and preparing to cut rates and increase liquidity. Buckle up for a few volatile weeks, but don’t lose sight of the bigger picture,” the founders added.

CVD recommends buying the dip in US stocks

The rapid sell-off was characterized by dip buying on platforms operating in the US, such as Coinbase, Gemini and Kraken, according to the cumulative volume delta (CVD) tracked by Paris-based Kaiko.

CVD is the total difference between the volume traded at the bid price (buy) and the volume traded at the bid price (sell) during a given period. A rising, positive CVD indicates that the volume of buying exceeds the volume of selling, while a falling, negative CVD indicates the opposite.

CVD on Coinbase, Gemini, and Kraken have been mostly positive since August 1, suggesting clear buying pressure or opportunity hunting during price declines.

The story continues

“Interestingly, while offshore exchanges like Binance and OKX have seen strong sell-offs since Friday, BTC’s cumulative volume delta (CVD) on most US platforms has remained positive, suggesting some investors are buying the dip,” Kaiko wrote in a note on Monday.

CVD of BTC. (Kaiko)