Binance Margin, a feature of the Binance cryptocurrency exchange, has announced that it will delist ten isolated margin pairs effective September 14, 2023, at 06:00 (UTC). The pairs to be removed are ALPHA/BUSD, ANT/BUSD, BAL/BUSD, COS/BTC, DGB/BUSD, FIRO/BUSD, OOKI/BUSD, QI/BTC, RVN/BUSD, and TWT/BUSD.
Timeline of Events
The delisting process will follow a structured timeline:
September 4, 2023, at 06:00 (UTC): Suspension of isolated margin borrowing for the affected pairs.
September 14, 2023, at 06:00 (UTC): Automatic settlement of users’ positions and cancellation of all pending orders on the specified pairs.
Users are strongly advised to close their positions and transfer their assets from Margin Wallets to Spot Wallets before September 14, 2023, at 06:00 (UTC). Binance has stated that it will not be responsible for any potential losses incurred during the delisting process.
Implications for Users
The delisting of these margin pairs could have various implications for traders. For one, it limits the options for leveraging assets in the short term. It also necessitates the reallocation of assets for those who have existing positions in these pairs.
Binance delisting actions are generally taken due to low trading volume, regulatory concerns, or technological issues with the assets involved.
Risk Management
The announcement also serves as a reminder for traders to exercise caution and risk management. Users are unable to update their positions during the delisting process, making it imperative to act before the deadline.
Bitcoin price has yet to reclaim the $50,000 level, but the actions of options market makers and margin traders at Bitfinex suggest the most recent correction is over.
Today Ether (ETH) price briefly touched $4,760, exciting investors and reminding the world that the altcoin is a mere 2.2% below the $4,870 all-time high reached 20 days ago. While the spot price action might be intriguing, let’s see what’s happening in Ether’s derivatives markets.
Ether ETH/USD price at Bitstamp. Source: TradingView
While it is possible to draw a descending channel that shows support at $3,960, today’s 5.4% positive move seems decoupled from Bitcoin’s (BTC) negative performance.
Earlier today, commodities and stocks took a hit after the U.S. Federal Reserve acknowledged that inflation is more than just a “transitory” trend and Fed chair Jerome Powell said that the bank’s relaxed money policies could end sooner than anticipated.
Retail traders are not fully confident
To understand how confident traders are about Ether’s price recovery, one should analyze the perpetual contracts futures data. This instrument is the retail traders’ preferred market because its price tends to track the regular spot markets.
In any futures contract trade, longs (buyers) and shorts (sellers) are matched at all times, but their leverage varies. Consequently, exchanges will charge a funding rate to whichever side demands more leverage, and this fee is paid to the opposing side.
Neutral markets tend to display a 0% to 0.03% positive funding rate which is equivalent to 0.6% per week. This indicates that longs are the ones paying and data shows retail traders have been mostly neutral since Nov. 4 and the last move above 0.07% happened on Oct. 21.
Top traders have reduced their long positions
Exchange-provided data highlights traders’ long-to-short net positioning. By analyzing every client’s position on the spot, perpetual and futures contracts, one can better understand whether professional traders are leaning bullish or bearish.
There are occasional discrepancies in the methodologies between different exchanges, so viewers should monitor changes instead of absolute figures.
Exchanges top traders ETH long-to-short ratio. Source: Coinglass.com
Despite Ether’s 17% rally over the past four days, top traders at Huobi and OKEx decreased their longs. This move was even more evident at OKEx because the indicator made a drastic move from favoring bulls by 120% on Nov. 25 to a meager 30% advantage three days later.
Currently, data indicates that whales and arbitrage desks have reduced their long exposure, while retail traders remain suspicious of the recent bull run.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
The $4,700 Bitcoin (BTC) price spike on Nov. 29 was likely a great relief for holders, but it seems premature to call the bottom according to derivative metrics.
This should not come as a surprise because Bitcoin price is still 15% below the $69,000 all-time high set on Nov. 10. Just 15 days later, the cryptocurrency was testing the $53,500 support after an abrupt 22% correction.
Today’s trend reversal was possibly encouraged by MicroStrategy’s announcement that it had acquired 7,002 Bitcoin on Monday at an average price of $59,187 per coin. The listed company raised money by selling 571,001 shares between Oct. 1 and Nov. 29, raising a total of $414.4 million in cash.
More bullish news came after German stock market operator Deutsche Boerse announced the listing of the Invesco Physical Bitcoin exchange-traded note or ETN. The new product will trade under the ticker BTIC on Deutsche Boerse’s Xetra digital stock exchange.
Data shows pro traders are still neutral-to-bullish
To understand how bullish or bearish professional traders are positioned, one should analyze the futures basis rate. That indicator is also known as the futures premium, and it measures the difference between futures contracts and the current spot market at regular exchanges.
Bitcoin’s quarterly futures are the preferred instruments of whales and arbitrage desks. Even though derivatives might seem complicated for retail traders due to their settlement date and price difference from spot markets, the most notorious benefit is the lack of a fluctuating funding rate.
The three-month futures typically trade with a 5%–15% annualized premium, which is deemed an opportunity cost for arbitrage trading. By postponing settlement, sellers demand a higher price and this causes the price difference.
Notice the 9% bottom on Nov. 27, as Bitcoin tested the $56,500 support. Then, after Monday’s rally above $58,000, the indicator shifted back to a healthy 12%. Even with this movement, there is no sign of excitement, but none of the past few weeks could be described as a bearish period.
Related:Key data points suggest the crypto market’s short-term correction is over
Lending markets provide additional insight
Margin trading allows investors to borrow cryptocurrency to leverage their trading position, therefore increasing the returns. For example, one can buy Bitcoin by borrowing Tether (USDT), thus increasing the exposure. On the other hand, borrowing Bitcoin can only be used to short it or bet on the price decrease.
Unlike futures contracts, the balance between margin longs and shorts isn’t necessarily matched.
OKEx USDT/BTC margin lending ratio. Source: OKEx
When the margin lending ratio is high, it indicates that the market is bullish—the opposite, a low lending ratio signals that the market is bearish.
The chart above shows that traders have been borrowing more Bitcoin recently, because the ratio decreased from 21.9 on Nov. 26 to the current 11.3. However, the data leans bullish in absolute terms because the indicator favors stablecoin borrowing by a wide margin.
Derivatives data shows zero excitement from pro traders even as Bitcoin gained 9% from the $53,400 low on Nov. 28. Unlike retail traders, these experienced whales avoid FOMO, although the margin lending indicator shows signs of excessive optimism.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Bitcoin (BTC) hiked 20% in seven days in an unexpected move that brought the price to its highest level since May 18. The price appreciation happened despite U.S. Treasury Secretary Janet Yellen reportedly supporting a broader definition of crypto companies in the HR 3684 infrastructure bill currently being considered in the U.S. Senate.
Even though Bitcoin price continues to surge higher, investors are worried that regulation could erase the recent gains, but derivatives indicators show no sign of confidence from the bears.
Bitcoin price at Coinbase, in USD. Source: TradingView
The proposal mandates that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service, including validators, miners, and protocol developers. However, Senator Cynthia Lummis and Senator Pat Toomey are lobbying to focus those requirements exclusively on brokers and the exchanges.
Holders keep ‘hodling’ and inflation benefits the crypto market
On-chain analysis firm Glassnode highlighted that coins held for 12 months and longer are not being moved despite the strong rally, indicating a “holding behavior.” Meanwhile, the Crypto Fear and Greed Index, a well-known indicator that tracks volatility, volume, social media, dominance and Google searches, moved from “moderate” to “greed.”
The 74 point indicator reached on August 8 was the highest level since April 18, indicating that investors firmly believe that the bottom of this cycle is behind us. The index ranges from 0 (extreme fear) to 100 for maximum greed.
It is worth noting that the United States Bureau of Labor Statistics will release July’s inflation report on Wednesday, with markets forecasting a 0.5% increase. Cryptocurrency markets also reacted positively after Federal Reserve chairman Jerome Powell failed to explain how the 5.4% year-over-year increase on the consumer price index (CPI) would recede.
Margin and futures markets show little activity from bears
Analyzing derivatives indicators can help confirm whether these positive expectations are reflected in professional traders’ data. The first one is the Bitfinex margin long ratio, which drastically changes when bearish bets are made.
Bitfinex BTC margin longs / total margin contracts. Source: Bybt
The above chart shows that after a brief period from July 9 to July 19, Bitfinex margin longs were back at 90% or higher. However, the ratio has not seen a downturn since then, displaying a lack of confidence from bears.
Bitfinex margin traders are known for creating positions of 20,000 or higher BTC contracts in a very short time, indicating the participation of whales and large arbitrage desks.
Next, analysts should evaluate the futures market by measuring the percentage of top clients either betting on the upside (longs) or downside (shorts). Keep in mind that the outstanding amount in longs and shorts contracts are balanced at all times in futures markets.
Bitcoin futures top traders aggregate long-to-short ratio. Source: Bybt
Bybt consolidates futures markets data from Binance, OKEx, and Huobi top traders. The current 1.14 indicator favors longs by 14% among those exchange’s largest users. Therefore, there has been a significant change over the last 12 hours because these traders were previously net short.
Both the Bitfinex margin and derivatives exchange futures markets point to a lack of confidence from bears right as Bitcoin breaks through the $45,000 resistance. This suggests that the recent 20% rally is well-founded and not simply a blip or the result of heavy liquidations.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Derivatives exchange Bitget is set to become one of the first exchanges to list USD Coin (USDC) as collateral for trading crypto derivatives.
The development comes courtesy of a strategic collaboration between the Singaporean crypto derivatives trading service and USDC stablecoin issuer Circle, as reported by Crowdfund Insider on Monday.
Bitget will support USDC margin for Quanto Swap Contract trading as part of the partnership, a move the exchange says will provide more liquidity for the market. USDC now joins Bitcoin (BTC), Ether (ETH), EOS, and XRP as accepted margins for Quanto Swap contracts.
Bitget launched Quanto Swap contracts back in April allowing traders to utilize one or more cryptocurrencies as margins for cross-currency trades.
Quanto Swaps are said to solve the issues related to inverse contracts as well as Tether (USDT)-paired contracts, especially in the area of capital utilization and costs.
Since Quanto Swaps are cross-currency trades with multiple margins, traders can switch markets without having to convert cryptocurrencies.
The collaboration with Circle will also reportedly scale Bitget’s trading channels. USDC will also be available for purchase on the exchange via debit and credit card payment channels among others.
Related: Stablecoin firm Circle to go public in $4.5B blank-check deal
CoinMarketCap data ranks Bitget as the eighth-largest crypto derivatives exchange with a 24-hour volume of almost $4 billion as of the time of writing.
Back in March 2020, the platform began working towards expanding its reach to the United States, securing a license from the U.S. Financial Crimes Enforcement Network. At the time, its 24-hour volume was about $1 billion.
The exchange was also among a list of platforms granted a temporary exemption from Singapore’s crypto exchange licensing regime.
In an interview with Cointelegraph earlier in July, Bitget CEO Sandra Lou stated that crypto exchanges must prioritize regulatory compliance. Indeed, financial regulators across the globe are increasing their scrutiny on exchanges as governments push more stringent policies.
On June 25, the amount of Bitcoin (BTC) margin shorts at Bitfinex increased by 22,000, equivalent to $726 million. At the time, Cointelegraph reported that there was a significant increase in Bitfinex’s spot volume market share starting at 9 am UTC, matching the demand in the short margin.
Data confirms that one (or more) whales actively shorted the market, betting on a price decrease. The average price of the trade was around $33,000, so every $500 difference would result in an $11 million profit or loss when closing the short position.
Related: Why Bitcoin’s next breakout may not be an altcoin season signal
In the cryptocurrency world, traders tend to imagine that for some entity or group to build such a sizable position, there must be some ‘inside’ knowledge to protect them. However, as previously shown by Cointelegraph, the Bitfinex margin shorts from early June were underwater by $65 million when Bitcoin reached $40,400 on June 16.
Bitcoin price at Coinbase, USD (left) vs. Bitfinex BTC Margin Shorts (right). Source: TradingView
The important distinction between margin trading and futures (perpetual or quarterly) is that margin traders might use their own Bitcoin to close the trade. Thus, instead of buying it at the market, one needs only to inform the exchange that his spot holdings should be used to cover the short position.
The same feature is not available at futures markets because the contracts are synthetic. Depositing 10 Bitcoin at the exchange does not “free” a short seller from having to actually buy back the $360,000 worth of contracts.
Therefore, the short position could have been closed even if Bitfinex’s spot volume doesn’t completely account for the $900 million traded during that 8-hour period on June 25.
Once again, the margin short close took place as the spot volume on Bitfinex increased on June 27. Therefore, it is reasonable to assume that the entities closing the margin trade did not previously buy Bitcoin to cover it.
The average price as the 22,000 Bitcoin margin shorts was closed in the 20 hours starting on June 26 afternoon was $32,500. This data indicates a potential $11 million gross profit for the trade. However, it is worth noticing that on June 26, Bitcoin peaked at $32,700, causing those margin shorts to face a momentary $15.4 million loss.
These traders could have closed their position as Bitcoin tested the $31,500 support, but the price showed resilience, and this might have erased most of the trade’s gains. Regardless of what caused the short trades to be closed, it displays weakness from bears or a considerable discomfort in holding bear positions below $35,000.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
One of the most common errors traders make when analyzing cryptocurrency markets is taking an exchanges’ bid and ask data and traded volumes at face value. When doing this type of analysis, the trader has to exclude the trading venues mentioned on multiple ‘fake trading volumes’ reports, like the one Bitwise published in March 2019.
There’s really no way to know if the top exchanges inflate their volumes by granting special access and zero fees for market makers.
Even the exchanges themselves have no way to know if a group of users are related or conducting multiple transactions among themselves to inflate prices or volumes. There are hundreds, if not thousands of influencers, pump and dump chat rooms, trading apps, and the like.
Therefore, not every wash trade or transaction between related entities has been brainstormed by the exchange or the crypto projects with a foundation or marketing team.
As Philip Gradwell, chief economist of Chainalysis, explained:
“If you want to get serious money into crypto, you have got to build up their confidence that there are actually good trading venues […] If you’re an exchange and you have good incentives to report real volume, you may actually get institutional money coming in, but if you don’t have those incentives, they’ll stay away.”
Investors usually speculate that these unethical practices happen only at exchanges located on remote islands. However, the U.S. Commodity Futures Trading Commission fined Coinbase after an employee “self-traded” to create the illusion of volume and demand for Litecoin (LTC) before Sept. 2018.
In case you’re wondering, decentralized exchanges (DEX) have also been used for ‘wash trading’ activity as there are barely any impediments, apart from network gas fees.
Bitcoin price at Coinbase, USD (left) vs. Bitfinex BTC Margin Shorts (right). Source: TradingView
Take notice how the 22,000 Bitcoin margin short increase at Bitfinex initiated as the price dropped below $34,000 and remained at a steady pace while Bitcoin continued to plunge.
The hourly price candles at Coinbase show a descending pattern that perfectly matches Bitfinex’s margin short activity. However, it is worth noting that Bitcoin’s $2.5 billion monthly options expiry took place at 8 am UTC, roughly one hour before the price action highlighted above.
Furthermore, the CME futures expiry occurred at 3 pm UTC, potentially involving 12.6k Bitcoin contracts worth $412 million. However, there is no reason to believe that derivatives expiries directly relate to the Bitfinex margin short increase.
One must analyze spot exchanges’ volumes to understand whether Bitfinex played a significant role in the Bitcoin price correction initiated in the early hours of June 25.
Hourly volume candles from the past four days clearly show a significant hike in Bitfinex’s market share starting at 9 am UTC on June 25. The movement lasted for seven hours but mostly dissipated shortly afterward.
Traders might as well have been spooked by a similar move earlier this month, when Bitfinex margin shorts increased to 25,000 BTC, right before the price initiated a one-week plunge down to a $28,800 low on June 22.
Such events may or may not result in a profitable trade for bears, usually making a heavy impression on traders. After all, not everyone has the margin required to short 22,000 Bitcoin, worth $726 million.
In short, there is a clear indication that the market downturn had little relation to derivatives expiry, as the Bitfinex spot volumes spike coincided with the margin shorts increase. However, once the pressure disappeared, Bitcoin could recover the $32,000 support, which might be enough to motivate buyers.
Weekends usually display lower volumes so it will be interesting to see how cautious investors are in the face of this mammoth short seller.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Bitcoin price is still in a rut, trading near $33,000 and trapped in a downtrend that just seems to get worse with the passing of each day. As the price slumps, analysts have consulted with several technical and on-chain metrics to explain the price collapse, but none of these have picked up on the exact reason.
One area of interest has been the sharp rise in short positions at Bitfinex in the past week. Traders are placing exaggerated importance on these Bitcoin (BTC) margin shorts as if they are predictors of the current market crash. Still, as Cointelegraph previously reported, analysts forget that Bitcoin margin longs are usually much larger.
As #Bitcoin is Bleeding slowly towards the range low (30-32K) we can see that Bitfinex Mega shorts are getting closed gradually
Still big shorts are open, but half of them are already closed
Keeping an eye on this cuz Finex whale was a key player in 19th of May crash$BTC pic.twitter.com/c4qeb6Nxe3
— Feras_Crypto (@FeraSY1) June 20, 2021
On June 18, longs outnumbered Bitfinex shorts by at least 22,800 BTC, but 87% of the short positions were closed before June 22. Currently, margin longs are 43,850 BTC higher than the amount shorted.
While those shorts are usually savvy traders, it is unlikely that they knew in advance that Chinese banks would prevent their clients from engaging in activities involving crypto trading or mining.
More importantly, these bearish positions were built while MicroStrategy was buying $500 million in Bitcoin after a successful senior secured note private offer. To make things worse, Michael Saylor’s business intelligence firm announced the intention to raise another $1 billion by selling stocks to buy Bitcoin.
Let’s take a look at how these courageous shorts fared.
Bitfinex margin shorts (blue) vs. Bitcoin price in USD (orange). Source: TradingView
On June 6, shorts increased from 1,380 to 6,700 at an average price of $36,150. Three days later, another 12,180 shorts were added when Bitcoin was trading at $37,050. Lastly, between June 14 and 15, shorts increased 6,000 to a 25,000 peak while Bitcoin averaged $40,100.
By looking at the Bitcoin prices when those short position increases took place, it is reasonable to assume that the 23,500 contract increase (green circles) had an average price of $37,625.
Related:Traders search for bearish signals after Bitcoin futures enter backwardation
Traders closed positions before BTC crashed bel$32,000
These short positions were steadily closed over the past three days when Bitcoin was already trading below $37,000. However, 17,000 short contracts had already been closed by the time the price plunged below $33,500. Therefore, it is implausible that the average price was below $34,500.
No one would complain about gaining 8%, shorting the market to generate a $73 million profit. However, it is essential to note that on June 16, when Bitcoin reached $40,400, these shorts were underwater by $65 million.
This analysis shows how even highly professional traders can go deep underwater. There’s no way to know if this trade would have been profitable had the crackdown on China not aggravated Bitcoin price or if MicroStrategy managed to raise the $1 billion before the price drop.
If anyone still believes in market manipulation, at least there’s comfort in knowing that pro traders can face drastic losses as well. However, unlike us mortals, whales have deep pockets and patience to withhold even the most rigorous thunderstorms.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Margin trading allows investors to borrow stablecoins or cryptocurrency to leverage their position and improve the expected return. For example, borrowing Tether (USDT) will allow one to buy Bitcoin, thus increasing their Bitcoin (BTC) long position in.
Investors can also borrow BTC to margin trade a short position, thus betting on price downside. This is why some analysts monitor the total lending amounts of Bitcoin and Tether to gain insight into whether investors are leaning bullish or bearish.
Are analysts flipping bearish based only on Bitfinex’s margin data?
This week some prominent analysts cited a surge in Bitcoin short positions at Bitfinex, peaking at 6,621 BTC on June 7. As Cointelegraph reported, independent researcher Fomocap found a visible correlation between margined short positions and the May 19 price crash.
However, when analyzing a broader scene, including the margin longs, perpetual contracts funding rate, and protective put options, there is no evidence of prominent players preparing for a surprise negative move.
A single instance of Bitcoin margin shorts spiking ahead of the negative price swing should not be considered a leading indicator. Furthermore, one needs to factor in the Bitcoin margin longs, an opposing and usually larger force.
As the above chart indicates, even on May 17 the number of BTC/USD long margin contracts outpaced shorts by 3.6 times, at 39,000 BTC. In fact, the last time this indicator dropped below 2.0, favoring longs, was on Nov. 26, 2020. The result was not good for the shorts, as Bitcoin rallied 64% over the following thirty days.
OKEx USDT/BTC lending ratio. Source: OKEx
Whenever traders borrow Tether and stablecoins, they are likely long on cryptocurrencies. On the other hand, BTC borrowing is mainly used for short positions.
Theoretically, whenever the USDT/BTC lending ratio goes up, the market is angled in a bullish manner. The ratio at OKEx bottomed at 3.5, favoring longs on May 20, but quickly returned to the 5.5 level. Therefore, there is no evidence of a significant movement favoring shorts on margin markets.
The perpetual futures funding rate is still flat
Perpetual futures prices trade very close to regular spot exchanges, making the lives of retail traders a lot easier as they no longer need to calculate the futures premium.
This magic can only be achieved by the funding rate charged from longs (buyers) when demanding more leverage. However, when the situation is reversed while shorts (sellers) are over-leveraged, the funding rate goes negative, and they become the ones paying the fee.
As displayed above, the funding rate has been mostly flat since May 19. Had there been a massive surge for shorting demand, the indicator would have reflected the move.
The options put-to-call ratio remains bullish
The call (buy) option provides its buyer with upside price protection, and the put (sell) does the opposite. This means traders aiming for neutral-to-bearish strategies will typically rely on put options. On the other hand, call options are more commonly used for bullish positions.
Take notice of how the neutral-to-bullish call options outnumber the protective puts by nearly 90%. Had professional traders and whales been anticipating a market crash, this ratio would have been positively impacted.
Investors should not make trading decisions based on a single indicator as the remaining markets and exchanges may not corroborate it. For now, there is absolutely no indication that heavy players are betting on Bitcoin short positions.
The views and opinions expressed here are solely those of theauthorand do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
