Bitcoin futures market
In the futures market, traders get liquidated althoughever they take a position and the cost changes furtherst them for more than a certain threshold.
The futures protracted liquidations dominance measures the percentage of liquidations that are on the “protracted” side.
On Feb 4, the ratio of prolonged liquidations was only 11%. This means that 89% of all liquidations were on the “short” side instead. This possible occurred by cause of the short-squeeze that occurred one day prior while the rate accelerated from $37,000 to $41,000. High rates in one or the other direction frequently occurs while a crucial number of traders are frozen offside in a sharp price move.
On Feb 13, the protracted liquidations dominance rate was at 61%, a relatively balanced rate.
After all, futures volume is quite small compared to that atop the past month. Therefore, even if a considerable number of traders are fixed offside, this would not be reasonable to cause a serious rate evolution.
A corresponding outlook is given by the put/call ratio, that is comparable to the short/lengthy ratio. However it deals with the options market instead of the futures market.
The put/call ratio is directly at 0.77. This means which options traders are favoring bets for the market instead of likewisest it.
An interesting observation is the case which the put/call ratio peaked at 1.28 on Feb 1. This supports the previous observation which the short squeeze of Feb 3-4 was effected by a considerable number of traders choosing to bet contrary to the market and then the cost moving furtherst to them.
After all, alike to the futures market, options contract volume is low. It pales in comparison to which of late January and early February.
Therefore, if a critical rate evolution were to occur, it would possible not be because of the derivatives market.
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