An overview of what is happening in the crypto markets, summarised by Crypto Finance AG Senior Trader Patrick Heusser in the market commentary.

Market commentary

Consolidation is in full swing...

Bitcoin BTC$ (4h)

In last week's report, I said that prices had set a local top at around $42k, and that we would most likely move sideways in a typical consolidation structure with lower highs and higher lows. This usually results in a potential symmetrical triangle formation, mostly accompanied by lower volatility and lower volume. However, OI stays elevated in the futures market.

Despite the potential triangle pattern looking rather clean, something does not feel right. It is not to be found directly in the chart, but rather in the structure of the derivatives market (futures). To be more precise: in the future term basis. We have been in contango since the bull run started (obviously), but I lack the proper reasoning as to why we are seeing the current widening. Please see the data table below for a better understanding.

I am open to inputs and comments of any kind. If you have a theory as why that basis widened despite the price dropping, please let me know. We were discussing the topic at the trading desk and someone threw out this idea: "Maybe we do not need to dig very deep: people have just started buying again, and liquidity providers are hedging it via term futures".

All intellectual property, proprietary and other rights and interests in this publication and the subject matter hereof are owned by Crypto Broker AG including, without limitation, all registered design, copyright, trademark and service mark rights.

Disclaimer

This publication provided by Crypto Broker AG, a corporate entity registered under Swiss law, is published for information purposes only. This publication shall not constitute any investment advice respectively does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. This publication is not intended for solicitation purposes but only for use as general information. All descriptions, examples and calculations contained in this publication are for illustrative purposes only. While reasonable care has been taken in the preparation of this publication to provide details that are accurate and not misleading at the time of publication, Crypto Broker AG (a) does not make any representations or warranties regarding the information contained herein, whether express or implied, including without limitation any implied warranty of merchantability or fitness for a particular purpose or any warranty with respect to the accuracy, correctness, quality, completeness or timeliness of such information, and (b) shall not be responsible or liable for any third party’s use of any information contained herein under any circumstances, including, without limitation, in connection with actual trading or otherwise or for any errors or omissions contained in this publication.

Risk disclosure

Investments in virtual currencies are high-risk investments with the risk of total loss of the investment and you should not invest in virtual currencies unless you understand and can bear the risks involved with such investments. No information provided in this publication shall constitute investment advice. Crypto Broker AG excludes its liability for any losses arising from the use of, or reliance on, information provided in this publication.