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Bitcoin needs to overcome this hurdle to make big strides in coming days

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Bitcoin accumulation continued in the spot market, even amid consolidating prices, post the September 7 crash. With supply on exchanges for the top coin continuing to drop, the focus now shifted towards the derivatives market. Notably, the Futures and Options market presented some interesting observations about the market sentiment and expectations from the top coin. 

This is how the market looks

After a very brief period of negative funding rates during the sell-off, perpetual markets returned to slightly positive funding rates suggesting that traders were still expecting an upward price momentum. The larger trend, however, looked neutral or as analyst Lex Moskovski said, the market may be in “disbelief.” 

Further, the daily traded volume in the futures market remained comparatively low, after the flash crash even though the open interest (OI) started climbing up, after bottoming on September 10. Open interest on all exchanges for September 17 was around  $8.57 billion which was lower than the $9 billion recorded a day prior.

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Source: Glassnode

Last week’s analysis by Ecoinometrics noted that purely in terms of trading activity, it isn’t clear if the trend of declining open interest and average daily volume had bottomed yet. This despite the open interest pushing up after the flash crash. In fact, a look at the CME Bitcoin options market tells that the sentiment hasn’t changed back to euphoria mode yet.

The market still long-term bullish?

Even though BTC’s price consolidated in the spot market, options traders seemed to be long-term bullish on the king coin. Notably, the OI by Strike presented almost 10K Call contracts for $50k and around 9K Call contracts for $60K and $90K respectively. 

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BTC OI by strike shows bets for $50k | Source: Skew

These were good figures for a market, especially amid the spot market consolidation. Further, even the Implied Volatility to Realized Volatility spread seemed to be at its highest level of almost 1%, a level last seen around May 26. This high difference between IV and RV could be indicative of both strong price hikes in the future or sharp market changes. What was worrisome was the fact that this high difference in IV and RV came while prices were much lower than the May tops. 

Where is BTC heading?

With the prices consolidating, short liquidations for all exchanges reached an all-time low which meant that the market was still in a dilemma about BTC price rise. Additionally, retail traders have been the most bullish on Bitcoin in the past but now the net amount of long positions held by the retail crowd it is still stuck at the 2020 baseline. Which is still 50% lower than at the peak in January, as pointed out by Ecoinometrics. 

While the aforementioned isn’t all bearish, they haven’t hopped back on the trend either. However, options OI change for September 21 has almost 357DBT for $50K BTC, which means that the market does anticipate a move upward. But weekends have been harsh on BTC, so for Bitcoin to make some large moves over the coming week it needs to cruise through the weekend without shedding prices. 

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Bitcoin

Terra prepares to burn more than 9% of LUNA’s total supply

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Burning nearly 90 million LUNA tokens into the community pool can put an upward pressure on the native token’s price.

Do Kwon, co-founder and CEO of Terraform Labs, the South Korean company behind the blockchain project Terra (LUNA), recently announced on Twitter that on-chain voting for project 44’s proposal will begin on Wednesday. ).

The proposal to start burning 88,675,000 LUNA from the community pool to mint 3 – 4 billion UST will reduce the total supply of native token by more than 9%.

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TVL on Earth reached ATH

After the integration of the IBC protocol last week and the launch of Wormhole V2 support for Terra, the total blocked value (TVL) in protocols on the network has reached a new high.

Last week, TVL on Earth reached $10.22 billion, with the Anchor, Lido, Mirror and Terraswap protocols accounting for more than 90% of the amount, according to data from DeFi Llama.

Currently, at US$9.97 billion, Terra is ranked as the fourth blockchain with the largest TVL, following Ethereum, Binance Smart Chain and Solana.

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New Bitcoin ETF Offers Shorting Bitcoin Futures, Creators Warn of Multiple Risks

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Direxion has filed for a Bitcoin ETF that allows traders to short BTC futures contracts

According to an article by Bloomberg, a new Bitcoin ETF, if approved, will enable traders to short Bitcoin futures. The filing was submitted on Tuesday, Oct. 26.

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Direxion wants to launch Bitcoin futures ETF for short-sellers

Bloomberg has written that, on Oct. 26, Direxion submitted documentation to launch the Direxion Bitcoin Strategy Bear ETF. Last week, two ETFs that track the performance of Bitcoin futures were launched by ProShares and Valkyrie.

Now, the BTC futures ETF industry in the U.S. may reach a new milestone—if the launch of the ETF for bears is approved by the U.S. Securities and Exchange Commission.

The debut of Bitcoin futures products last week prompted Bitcoin growth to almost $67,000 and a new all-time high.

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However, today, the flagship cryptocurrency retreated below the $60,000 level as a mind-blowing half-a-million worth of liquidations were conducted across major exchanges: Binance, Bitfinex, OKEx, Huobi and so on.

Slightly over $500 million worth of those crypto liquidations were long positions.

BITO ETF gains $1 billion in just two days

ProShares Bitcoin ETF last week became the second-most-traded asset on the NYSE on its first day of trading. Buy orders to the tune of 10,100 were placed on BITO (the ticker the ETF goes by), and seven times more orders were placed to sell it.

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After trading for two days, BITO reached $1 billion in net asset value. That is the equivalent of the net asset value of several Canadian Bitcoin ETFs that have been trading for a while already.

Direxion fund bears lots of risks

The new Bitcoin ETF filed for by Direxion bears numerous financial risks for short-sellers, the company warns. Trading this ETF may lead to shorters getting wiped out, Bloomberg writes, and Bitcoin’s massive price swings would be a problem here, too.

The SEC filing states that if you are not prepared to lose all your funds by investing in this ETF, you should not bet on it.

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This week, some in the crypto community also expect another Bitcoin futures ETF to kick off—the one filed for by the VanEck asset manager.

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Blockstream is sponsoring this tech for scaling Bitcoin [BTC]

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Major blockchain technology company, Blockstream has announced its sponsorship of work on Federated E-Cash. For the uninitiated, David Chaum was the man behind the concept of E-Cash that predates Bitcoin.

E-Cash Federation, on the other hand, is an entity that comprises of independent members assembled to develop a multi-sig wallet for the purpose of being a “blind, distributed custodian by acting as an e-cash mint.”

One of the main factors that have impeded Bitcoin’s adoption is scalability. On that note, Adam Back-led Blockstream has made significant strides. Even as scaling solutions like the Lightning network and federated sidechains have paved the way for large-scale adoption of the crypto-asset, they are yet to see substantial growth. Here come Federated blind mints, which the tech firm believes are a “natural complement to the existing scaling solutions.”

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Blockstream’s tryst about Bitcoin scaling

Blockstream stated that Federated E-Cash can help scale Bitcoin. It cited an innovative exciting possibility of integrating LN into federated mints. This, in turn, would make them interoperable with each other and the broader space. It further stated,

“One could imagine the emergence of community-run federations, where users have a natural trust in the federation members, which isn’t the case with traditional custodians. For the larger number of Bitcoin users who rely on custodial wallets to store their bitcoin, switching to an E-Cash Federation, reduces the trust profile and increases the privacy guarantee for these users.”

Blockstream is looking at an experimental project of a Federated E-Cash scheme dubbed MiniMint that is currently under development.

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$16M Funds for Bitcoin mining STO

The latest news comes a week after Blockstream announced raising $16 million funds in the sixth tranche of its BTC mining-focused security token [STO], called the ‘Blockstream Mining Note [BMN].’ This marked the rapidly rising interest from individual and institutional investors.

It was in March 2021 when Blockstream formally unveiled its BMN security token. Its offering essentially facilitated non-United States investors with an alternative to mine Bitcoin or invest in BTC mining stocks mining BTC with the help of BMN’s associated hash rate. Additionally, it was issued on Bitcoin’s Liquid sidechain with each BMN Series 1 granting market players up to 2k Tera hashes per second of BTC mined at the Canadian blockchain technology company’s enterprise-grade mining facilities.

Besides, Blockstream is also gearing up to list its BMN security token on Bitfinex Securities, which happens to be a relatively new STO platform by Bitfinex.

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Blockstream’s tryst about Bitcoin scaling

Blockstream stated that Federated E-Cash can help scale Bitcoin. It cited an innovative exciting possibility of integrating LN into federated mints. This, in turn, would make them interoperable with each other and the broader space. It further stated,

“One could imagine the emergence of community-run federations, where users have a natural trust in the federation members, which isn’t the case with traditional custodians. For the larger number of Bitcoin users who rely on custodial wallets to store their bitcoin, switching to an E-Cash Federation, reduces the trust profile and increases the privacy guarantee for these users.”

Blockstream is looking at an experimental project of a Federated E-Cash scheme dubbed MiniMint that is currently under development.

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