Bitcoin traded below the 50, 100 and 200-day moving averages in December, but stability in the Diffie sector flashes positive signs in early 2023
The year 2022 was a rollercoaster ride of ups and downs for the blockchain industry. While the first quarter of the year looked promising, the crypto industry has been on a downward spiral ever since. Despite growing signs of a global macroeconomic slowdown, these headwinds hamper the potential recovery of the blockchain industry.
The crypto market shows some signs of stability and a possible rebound at the beginning of the new year. Cointelligraph Research publishes monthly Investors Insights for those serious about understanding the various areas of the crypto-space including venture capital, derivatives, decentralized finance (Defi), regulation and more.
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Bitcoin vulnerability in 2023?
Bitcoin after positive news from the Consumer Price Index on December 13th.
It was observed that the provisional price jumped to $18,300. Yet despite the bull’s best efforts, BTC has not been able to keep a daily close above $18,000 from November 9, 2022. $15,000 to $17,000 , which… handed the bears victory after options expired on December 30, when the bulls The price needed to be pushed above $18,000 to avoid a potential $340 million loss heading into the year.
BTC rose 1,650% to below $4,000 in March 2020, boosted by the quantitative easing policy of the United States Federal Reserve. As of December 31, 2022, investors who bought BTC in March 2020 are sitting on gains of about 330%. After the collapse of FTX, the value of BTC could not recover. The fall in prices to levels last seen two years ago is causing problems for both long-term and short-term holders, with a total loss of more than 8 million BTC now, and whaling interest falling to weaker price strength It makes gestures
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Bitcoin derivatives market upside?
Skew is a key measure of market sentiment and capital flows because it encapsulates what people are willing to pay for asymmetric payments in the upward or downward direction of the market The most common measure of skewness is the 25 delta (25D). . . . . It compares the underlying volatility of an out-of-the-money (OTM) call with a 25% delta versus an established OTM with a 25% delta.
Delta can be understood as the probability that an option in money will expire. A $16,000 one-week call would be worth about 100% delta of $16,500, while a $36,000 one-week call would have about 0% delta. This is because, given general volatility, it is almost certain that the $16,000 call will remain in the money, while the $36,000 call will remain OTM
Below is a chart of the 1 million 25D Bitcoin options rejected from February 2021. The Y-axis measures the underlying volatility difference between a 25D call and a 25D put at the same expiration Negative rejection means that the market pays out want to do so as to hedge the risk of a further decline in the spot price of bitcoin. The 25D average has been rising over the last two years, indicating growing bearish sentiment. However, the 25D has improved 46% since November, suggesting that traders are becoming a bit more optimistic.
Cointelligraph Research Team
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Demelza Hayes, Ph.D., is Cointelegraph’s director of research. Hayes has assembled a team of subject matter experts in finance, economics and technology to bring to market a leading source of industry reports and insightful analysis. The team uses APIs from a variety of sources to provide accurate, useful information and analysis.
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