Bitcoin experienced a drop to $26,000 in its price recently, and in a recent episode of Cointelegraph’s “The Market Report,” analyst Marcel Pechman explores the reasons behind this drop. Pechman examines the derivatives market analysis, which indicates that Bitcoin options and futures metrics do not show any signs of professional traders going bearish. While this does not guarantee an immediate return to the $29,000 support level, it does reduce the likelihood of an extended correction.
Pechman provides insight into BTC liquidity and volatility through a Kaiko data chart. Since the FTX collapse in November 2022, liquidity and volatility have significantly decreased. Therefore, it is important to consider whether the 11.4% price drop in mid-August worsened conditions due to the largest futures liquidations since November 2022.
Another aspect analyzed by Pechman is the Bitcoin futures premium, which settled at a neutral 6% following the recent crash. This suggests balanced demand between leveraged longs and shorts. Furthermore, the BTC options skew, ranging from -7% to 7%, also indicates reasonable downside protection prices.
Moving on to discuss macroeconomic analyst Lyn Alden’s perspective, Pechman highlights Alden’s opinion on a proposal for a common currency among BRICS nations (Brazil, Russia, India, China, and South Africa). Both Pechman and Alden share the belief that this proposal is unlikely to succeed. However, Alden notes that if BRICS countries use their own currencies for foreign trade, it could weaken the United States dollar, offering unconventional advice to crypto investors.
For a detailed analysis of these topics, viewers are encouraged to watch the full episode of “The Market Report” on the Cointelegraph Markets & Research YouTube channel. By subscribing to the channel, viewers can stay up-to-date with the latest content and receive regular market insights.
Overall, the recent drop in Bitcoin’s price to $26,000 has been analyzed by experts who suggest that the lack of bearish sentiment among professional traders in the derivatives market reduces the likelihood of a prolonged correction. Additionally, metrics such as BTC liquidity, volatility, futures premium, and options skew point towards a balanced market demand and reasonable downside protection prices. The analysis also includes insights from macroeconomic analyst Lyn Alden on a proposal for a common currency among BRICS nations. While the success of this proposal is doubted by experts, it is believed that it could weaken the US dollar if implemented, offering potential opportunities for crypto investors. To gain a comprehensive understanding of these topics, viewers are encouraged to watch the full episode of “The Market Report” on the Cointelegraph Markets & Research YouTube channel.