1. Grayscale's total assets under management fell to $44.2 billion According to the official Twitter account, as of March 22, Eastern Time, Grayscale's total asset management scale has dropped to $44.2 billion. The trading price of the Bitcoin Trust Fund (GBTC) is $49.52 per share, down 6.48% from the previous day; the trading price of the Ethereum Trust Fund (ETHE) is $16.53 per share, down 4.23% from the previous day. 2. Overview of current liquidation situation According to the market statistics report of imbtc.com, the total liquidation of the contract market in the last 30 minutes was 32.46 million US dollars, of which BTC liquidation was 26.21 million US dollars and ETH liquidation was 3.2 million US dollars. 3. Analysis: Combining these indicators, we can find the local bottom of Bitcoin price Futures contract volumes have grown significantly over the past year, as evidenced by the growth in total open interest, which is the total number of contracts that have not been delivered. Open interest has risen 450% in six months from $3.9 billion to $21.5 billion currently. Sometimes traders believe that high or low funding rates and surging open interest indicate a bullish market, but as Cointelegraph has previously explained, this is not the case. This post will take a quick look at funding rates and how traders can interpret funding rates for perpetual futures contracts. Funding rate can be used as an indicator of bull and bear markets Perpetual futures contracts are typically charged an embedded rate every 8 hours to ensure that there is no imbalance in trading risk. Although the open positions of buyers and sellers are matched at any time, their leverage may be different. When longs use more leverage, they will be the ones paying the fees. Therefore, this situation is interpreted as bullish. Conversely, when shorts use more leverage, resulting in negative funding rates, the opposite is true. Whenever traders use high leverage, analysts point to the risk of cascading liquidations. While this is true, this can last for weeks and sometimes deleveraging happens on its own. Therefore, as the data shows, such indicators should not be used to predict local tops. Bull markets usually create positive funding rates when buyers are overly excited. However, this situation still creates a huge storm for shorts, because a 5% price correction will force longs using 20x leverage to close their positions. These orders may put pressure on prices, causing a 10% drop in prices, followed by a cascade of liquidations. For this reason, experts and analysts often cite excessively high funding rates as the primary cause of cascading liquidations during market declines, even though funding rates can remain abnormally high during bull markets. Funding rate can find local bottom Bitcoin futures funding rate and USD price Source: Bybt Note how the funding rate reached 0.15% or even higher every 8 hours in February when local tops were not forming. This rate is equivalent to 3.2% per week, which is a bit burdensome for traders holding long positions. Therefore, trying to use this indicator to time market peaks will rarely yield good results. On the other hand, the Bitcoin price bottoms on January 27 and February 28 were formed when the funding rate was low. These moments showed that traders were reluctant to use leverage to go long and also proved their lack of confidence. While this indicator may be helpful in determining if a local bottom has formed, it certainly should not be used by itself as the funding rate will typically level out after any significant price correction.
Additionally, sustained high funding rates can attract arbitrage traders who sell perpetual futures and simultaneously buy monthly contracts. Therefore, this indicator should be used with caution. To confirm investors’ distrust of open longs, we should monitor the premium of monthly contracts, or “basis”. Unlike perpetual contracts, those futures with fixed expiration dates have no funding rate. Therefore, their prices will be very different from those of regular spot exchanges. OKEx quarterly futures basis source: Skew By measuring the price difference between futures and the regular spot market, traders can judge how bullish the market is. As long as buyers are overly optimistic, the annualized premium (basis) of quarterly futures contracts will reach 20% or more. Combining these indicators, we can find the local bottom of Bitcoin price On the other hand, when the indicator shows a local bottom, it usually means that traders’ confidence is growing. Therefore, buyers using low leverage can get better “confirmation” when the perpetual contract funding rate is low. By combining the perpetual contract funding rate with the monthly contract basis, traders will be able to better read market sentiment. Similar to the popular "fear and greed" indicator, traders should buy when others are skeptical. As shown in the above figure, this situation usually occurs when the funding rate is lower than 0.05% per 8 hours and the quarterly contract basis hits bottom. Bitcoin bull market may enter the late stage, whale addresses have reduced their holdings by about 307,000 BTC Bitcoin prices continue to trade between $53,600 and $61,500 as traditional financial giants Morgan Stanley and Visa announce further adoption of Bitcoin. Morgan Stanley has launched three Bitcoin investment tools to serve high-net-worth clients and investment firms, while Visa follows Mastercard’s lead and will support the purchase of Bitcoin through the Visa network. It is clear that Bitcoin’s impact on global investors is becoming increasingly difficult to ignore. Retail investors are accumulating Bitcoin Since March 2018, the number of addresses holding no more than 1 BTC has increased, and the percentage of BTC accumulated by these addresses has also increased. Three years ago, the number of BTC held by such addresses accounted for 3.97% of the total supply, and now accounts for 5.2%. The continued accumulation of retail investors indicates that participants have a strong willingness to HODL. Immediately after Black Thursday on March 12, 2020, we observed a significant increase in the number of addresses holding 0.1BTC-1 BTC. Although the total number of BTC in such addresses has dropped slightly after the Bitcoin price rose to $42,000, the current holdings have risen to an all-time high. Whale BTC wallet addresses remain relatively unchanged Interestingly, while we continue to see retail investors accumulating BTC, the holdings of large wallets (>100 BTC) have remained relatively unchanged over the past three years. The chart below shows the Bitcoin supply held by addresses with balances of 100 BTC and above. These wallets currently hold 62.62% of the total BTC supply and have increased by 0.87% over the past 12 months. The wallet balances of these large wallets have also been shuffled, which may be due to cold storage or custody arrangements. Since BTC broke through $20,000 in December 2020, we have seen roughly the same and opposite changes in the holder balances of large wallets: Octopuses and minnows (10 BTC-100 BTC) saw their Bitcoin holdings drop by 56,000 BTC. Dolphins and sharks (100 BTC - 1,000 BTC) increased their Bitcoin holdings by 331,000 BTC; Whales and humpbacks (1,000 BTC - 10,000 BTC) saw their Bitcoin holdings drop by 307,000 BTC;
Looking at the net BTC held by these holders, we see a decrease of approximately 32k BTC, which is only 0.24% of the total amount of addresses in this category. At the same time, retail holders accumulated approximately 29,800 BTC during the same period, indicating that BTC wealth is gradually being transferred. Bitcoin hits $100,000 in Türkiye as Lira plummets! The Turkish lira plummeted against the US dollar at the opening on the 22nd, with a drop of more than 15% at one point, falling to 8.485 liras per dollar, approaching the historical record low. Turkish President Erdogan ordered the removal of hawkish central bank governor Naci Agbal on the 20th and appointed Sahap Kavcioglu as the new governor, raising concerns that the recent series of interest rate hikes may be reversed and damage the credibility of the central bank. The sky-high price of Bitcoin appeared after the price of the Turkish lira fell sharply. Currently, the cost of buying a Bitcoin in Turkey's peer-to-peer crypto market has soared to more than $100,000. According to data from LocalBitcoins.com, the lowest asking price for Bitcoin has reached 509,840 Turkish liras (about $64,000). At the same time, the asking price on some offline exchanges has risen to $100,000, almost twice the global asking price. In countries experiencing disastrous economic policy shifts, Bitcoin has become an attractive hedge because it is outside the purview of governments and central banks. Hyperinflation in Venezuela and Zimbabwe, the Greek debt crisis, and China’s capital controls have boosted the value of Bitcoin in the past. This time is no exception. After the Turkish lira fell, Google searches for the keyword "Bitcoin" almost doubled. |
