State of Bitcoin Market Structure powered by Velo Data

Download report

Share this report

‍

Over the last month we have seen heightened volatility in the market as Bitcoin consolidates just below $45,000. The most noteworthy period of this consolidation took place last week on January 3rd, as the entire market underwent a liquidation cascade, potentially driven by a headline eluding to Bitcoin ETFs potentially getting denied by the SEC. This led to over a billion dollars of open interest being wiped on Bitcoin perpetual futures and several billion dollars on altcoin perpetual futures open interest. Shown below, we can see that although price has almost fully retraced the decline, interestingly open interest and funding rates have both yet to recover.

‍

‍

We also can see the decline and similar wipeout in quarterly futures, shown below by the 3 month futures basis (difference between spot and contract price). Currently the 3 month futures basis sits just below 14% annualized, down from over 20% last week.

‍

Meanwhile, shifting over to the CME, futures open interest remains north of $5 billion. With the basis for CME futures still sitting at roughly 15% annualized, the questions remains of whether these (presumably traditional finance firms) will look to offload these positions into a potential ETF announcement this week.

‍

‍

Shifting over to cumulative return by geographic trading sessions, we can see that US trading hours continue to lead the way, with EU trading sessions clearly lagging behind.

‍

Conclusion: The last month has been a period of consolidation for the leading digital asset. With many being concerned about the ETF announcement being sell the news and froth in the futures market that could accelerate such flows, last week's futures market liquidation cascade, reflected by both perpetual futures and 3 month futures data, may alleviate some of these worries. With that being said, over $5 billion dollars of futures open interest on the CME still remains at a basis of 15% annualized. A bear case could be made that the unwinding of this would cause significant sell pressure for the market, however it is unclear why these participants wouldn't have begun to unwind these positions already with the final ETF deadline just 3 days out. We expect the coming week to have immense volatility.

‍

Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.

‍

Header

Neque sodales ut etiam sit amet nisl purus non tellus orci ac auctor
Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti
Mauris commodo quis imperdiet massa tincidunt nunc pulvinar
Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti

Header

Subheader

Vitae congue eu consequat ac felis placerat vestibulum lectus mauris ultrices cursus sit amet dictum sit amet justo donec enim diam porttitor lacus luctus accumsan tortor posuere praesent tristique magna sit amet purus gravida quis blandit turpis. Vitae congue eu consequat ac felis placerat vestibulum lectus mauris ultrices cursus sit amet dictum sit amet justo donec enim diam porttitor lacus luctus accumsan tortor posuere praesent tristique magna sit amet purus gravida quis blandit turpis.

Subheader

Neque sodales ut etiam sit amet nisl purus non tellus orci ac auctor
Adipiscing elit ut aliquam purus sit amet viverra suspendisse potenti
Mauris commodo quis imperdiet massa tincidunt nunc pulvinar

Odio facilisis mauris sit amet massa vitae tortor.

Lorem ipsum dolor sit amet, consectetur adipiscing elit lobortis arcu enim urna adipiscing praesent velit viverra sit semper lorem eu cursus vel hendrerit elementum morbi curabitur etiam nibh justo, lorem aliquet donec sed sit mi dignissim at ante massa mattis. Lorem ipsum dolor sit amet, consectetur adipiscing elit lobortis arcu enim urna adipiscing praesent velit viverra sit semper lorem eu cursus vel hendrerit elementum morbi curabitur etiam nibh justo, lorem aliquet donec sed sit mi dignissim at ante massa mattis. Lorem ipsum dolor sit amet, consectetur adipiscing elit lobortis arcu enim urna adipiscing praesent velit viverra sit semper lorem eu cursus vel hendrerit elementum morbi curabitur etiam nibh justo, lorem aliquet donec sed sit mi dignissim at ante massa mattis.

Vitae congue eu consequat ac felis placerat vestibulum lectus mauris ultrices cursus sit amet dictum sit amet justo donec enim diam porttitor lacus luctus accumsan tortor posuere praesent tristique magna sit amet purus gravida.

Interesting types examples to check out

‍

State of Bitcoin Market Structure powered by Velo Data

Header

Header

Subheader

Subheader

Interesting types examples to check out

Login

Forgot Password