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".
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