In June, as bitcoin approached its mining cost basis, DeFi plummeted by 33 percent in TVL, and weekly BTC options hit their highest level on record.
Despite the fact that the market appears to be slowing down, several areas of strength can be found in the blockchain sector. The perpetual futures funding rates for Bitcoin (BTC) and Ether (ETH) have reverted to positive on major exchanges, demonstrating derivatives traders’ bullish sentiment. In addition, Bitcoin has started trading below its cost basis, which has previously been associated with previous market lows. June was a difficult month for decentralized finance (DeFi), when total value locked and crypto stocks dropped by 33% and -42.7%, respectively.
In different sections of the market, there is an ongoing struggle between bulls and bears. To assist cryptocurrency traders navigate the battlefield, Cointelegraph Research recently launched its monthly “Investor Insights Report.” In this edition, the research team analyzes the past month’s major market-moving events and key data across many sectors of the industry. The researchers offer expert analysis and observations that can benefit serious blockchain market participants.
Derivatives can be a good predictor of market sentiment. Leading up to June, the market had been characterized by a strong bearish mood. The volatility skew in a market indicates whether there is significant bearish or bullish sentiment.
On June 18, the Bitcoin 25-delta skew reached 36 percent, which is far above previous highs. Since then, some optimism has returned, bringing the skew down to 17%. This indicates that investors believe that the crypto market will recover in the next few months.
Long calls on Bitcoin and Ether are currently trading at premiums, which indicates that traders are optimistic about the year’s end. However, solvency concerns and the potential for contagion remain in the market, as well as investor and regulator anxiety over these issues.
In range-bound markets, strangles may be employed by traders to generate profits if Bitcoin stays stable. The essence of a strangle is to sell puts and calls at various strike prices. Astrangles, like their name implies, are putting puts (a chance to sell) below and above the current spot price, as well as selling calls (a chance to buy) at $30,000 on the downside and a call at $20,000 on the upside. If they expire without any transaction costs incurred after a month
Currently, the available skew options skew has a significant slope, with an implied volatility difference of up to 10% between the Deribit $17,000–$24,000 strike prices and those on the Chicago Mercantile Exchange. This suggests that a risk reversal using a short put at $17,000 and a long call at $24,000 is in good form.
Is the bulls’ momentum gaining traction? Bitcoin’s net unrealized loss has hit a three-year low, suggesting that its current market value is nearly 17% lower than its aggregate cost basis. When losses exceed 25%, global lows have historically occurred. The downsloping moving averages and the relative strength index in the oversold region suggest that bears are in control.
However, for the first time since March 2020, Bitcoin has traded lower than its mining cost basis, which has previously served as a sign of global recession and price bottoms in Bitcoin. The net unrealized gain/loss indicator is another indication that the bulls may be on top.
The Investor Insights Report covers a range of issues, including security tokens, DeFi (decentralized finance), blockchain gaming, cryptocurrency mining, blockchain-related equities, and regulation. The subject matter experts keep up with all recent news and developments to cut through the clutter and offer key insights into the blockchain industry.
The last section of the document focuses on key elements that impact the issue. Subject matter specialists describe the most significant events that will have a major influence, and their information is made easier to understand in order to provide an overview, highlights, and forecast for what may be on the way. The newsletter is now available for subscription, with complete charts and comprehensive analyses included.
The Cointelegraph Research team consists of some of the top experts in the blockchain sector. The researchers on the team are dedicated to providing the most accurate, thorough information available on the market, combining academic rigor and filtered through real-world experience.
The Cointelegraph editorial team is made up of experts with extensive knowledge of the cryptocurrency and blockchain ecosystem, including Buterin, Don Tapscott, Satoshi Nakamoto, Nick Szabo, Cornell University professors Tim Shorts and Emin Gün Sirer. The head of Research at Cointelegraph is Demelza Hays, Ph.D., who has assembled a team of subject-matter experts from across the fields of finance, economics and technology to bring you the finest industry reports and intelligent analysis possible. To deliver accurate, valuable information and analysis, the team utilizes APIs from a variety of sources.
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