Derivatives and Bitcoin

Feb 20, 2023

Market derivatives data as a short-term trading tool

Market derivatives data can be used as a tool for short-term trading. The actions in the market on February 15th (yesterday) provide a good illustration of what happens when buyers and sellers confront each other.

Here is a detailed account of what seems to have occurred during the day yesterday:

1️⃣ Short positions are opened, resulting in a decrease in the price of Bitcoin while open interest increases.

2️⃣ Due to the increasing interest, the price starts to move against the short positions, leading to the liquidation of these short positions. As a direct consequence, an upward impulse candle is formed. This analysis is based on a decrease in open interest and a spike in liquidations.

3️⃣ The price of Bitcoin then enters a sideways movement. Long positions are opened, indicating a sign of FOMO*.

4️⃣ Subsequently, the price decreases due to the liquidation of positions.

We can observe that there is a wealth of information in market derivatives data that can be utilized within relatively short time periods.

Note: FOMO stands for Fear Of Missing Out, indicating a sense of urgency or excitement to participate in a market trend.


The influence of macroeconomic information on the surge in Bitcoin price

The Securities and Exchange Commission (SEC) is reportedly considering exercising its authority under Section 411 of the Dodd-Frank Wall Street Reform and Consumer Protection Act by amending and redesignating Rule 206(4)-2 under the Investment Advisers Act of 1940 (“Advisers Act”) to enhance investor protection regarding client assets held by investment advisers.

The proposed amendments would:

1️⃣ Expand the current custody rule to protect a broader range of client assets and advisory activities under the rule’s safeguards.

2️⃣ Enhance the custody protections that client assets receive under the rule.

3️⃣ Update related recordkeeping and reporting requirements for advisers.

These potential regulatory changes, if implemented, could have implications for the Bitcoin market and its participants. Investors and market participants often closely monitor macroeconomic developments and regulatory actions as they can significantly impact market sentiment and the overall trajectory of asset prices, including Bitcoin. Therefore, news of regulatory proposals such as those mentioned can contribute to increased market volatility and influence the price movement of Bitcoin in the short term.


Breaking news and a game changer !

This is one of the main reasons for the strong surge in the price of Bitcoin today, reaching a high of $25,250.

*FOMO: Fear Of Missing Out. Source:

Note: Il est important de se rappeler que le trading est une activité risquée et qu’il est important de se rappeler que les pertes sont possibles. Il est donc important de bien comprendre les risques associés au trading et de ne pas investir de l’argent qu’on ne peut se permettre de perdre. Il est aussi important de se rappeler que les performances passées ne garantissent pas les résultats futurs. Il est donc important d’avoir une stratégie de gestion de risque appropriée en place et de ne pas se fier uniquement à un seul indicateur pour prendre des décisions d’investissement.

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