BitcoinBTCLINKNews

Sell Orders Dominate Perpetual Futures Markets Ahead of Spot Bitcoin ETF Decision: CryptoQuant

1 Mins read

Crypto market participants are moving to the sidelines, leading to low activity in the derivatives market as the date for the U.S. Securities and Exchange Commission’s (SEC) decision on spot Bitcoin exchange-traded funds (ETF) approaches.

According to a weekly report from market intelligence platform CryptoQuant, the decline in derivatives market activity is due to the rising costs of opening long positions and the spike in profit-taking among investors.

Sell Orders Dominate Perpetual Futures Markets

Bitcoin (BTC) began the year trading around $42,400, rallied to $45,800 on January 2, and fell back to $41,800 the next day. The price fluctuations have been accompanied by relatively low activity in the derivative markets.

CryptoQuant’s analysts said open interests in perpetual futures markets are still at low levels, showing that BTC investors and traders stepped back from opening long positions after the December 2023 price rally and have even begun to take profits. This is evident in market leverage falling to its lowest since January 2022.

The soaring costs of opening long positions also caused traders to refrain from buying in the perpetual futures markets. Prices are currently as high as they were when BTC and Ether reached their all-time highs in November 2021.

The Taker Buy Sell volume ratio staying below one indicates that sell volume is dominating the perpetual futures markets as investors focus on realizing profits from the recent rallies. Although there is an increase in sell orders, short-term unrealized profits are still high, and this has preceded price corrections.

High Short-term Unrealized Profits

Last week, CryptoPotato reported that market participants like miners and short-term holders were sitting on unrealized profits with margins as high as 30%, adding that while they spent BTC at a profit, rallies usually came after short-term losses have been realized.

The development came as traders began to pay too much to open long positions, threatening to push BTC to $32,000, the short-term holder realized price.

The crypto community expects BTC to rally after the SEC approves the ETFs between January 8 and 10, but CryptoQuant has warned that the asset may plummet due to current market occurrences, turning the widely anticipated announcement into a sell-the-news event.

Source

1409 posts

About author
Harry is a crypto enthusiast and experienced trader with a track record of success. With a deep understanding of blockchain technology, he has analyzed market trends and identified profitable opportunities, resulting in impressive returns. Harry 's expertise lies in developing effective trading strategies that leverage the potential of cryptocurrencies. Through his articles, guides, and educational resources, he shares his insights and knowledge, helping individuals make informed trading decisions. With a keen eye for market patterns, Harry has navigated the volatile crypto landscape with confidence. Stay tuned for valuable perspectives and expert advice from Harry as he contributes to the Ailtra platform.
Articles
Related posts
CryptoNews

Indonesia's presidential elections pose uncertainty for the thriving cryptocurrency industry

1 Mins read
Indonesia, has emerged as a formidable player in the global cryptocurrency space in recent years. However, the nation’s upcoming general elections in…
BNBCryptoNews

Understanding the Cryptocurrency Boom - Dogecoin Climbs Due to X Payment Integration, While Stellar and BNB Also Experience Growth

1 Mins read
The cryptocurrency market has been experiencing notable gains over the past few days. This is led by an unexpected and surprising spike…
CryptoNews

Crypto Entrepreneur Charged with Defrauding Investors Out Of $150 Million Through Marketing Scheme

1 Mins read
Federal prosecutors have charged a German businessman with securities fraud, wire fraud and money laundering for allegedly scamming over 150 investors out…

🚀 Ailtra Crypto Bot Earned $8.9M Million in 7 Months with 0% Loss!

🚀 Ailtra generated $7.4 in 7 months only!

Unlock 20-75% Monthly Returns & Get $100 FREE!

Meet Ailtra Bot! Launching on 31st March an AI Crypto Bot boasting 20%-75% monthly gains and $7.5M earnings in 7 months. 💸Secure a FREE $100 bonus and up to $20K potential via referrals every month. 🎉Only 1,000 spots are available in first phase – claim yours fast! 🔥

Ailtra.ai will not disclose your account information to any 3rd parties.