Cautious Shorts, External Pressures, Free Leverage

Crypto Compass 13

Key Takeaways

• Bitcoin Risk Signal near high-risk zone threshold, could we see one dip below $27k?

• Derivatives suggest the market is cautiously shorting.

• Alts look oversold like bitcoin. We believe the bottom is close.

• We discuss a narrative that is outperforming and a strategy for this environment.

• The Bitcoin Risk Signal is near the high-risk zone threshold (25), yet bitcoin remains in check within the $27k range. Volatility is relatively low with expected moves ranging from $360 to $930 dollars per 4-hourly and 1-day candles respectively.

• The question remains: will go lower before racing toward $35k? Macro headwinds strengthening, but the cross-asset structure suggests a bullish risk asset outlook.

  

• Looking at the derivatives market we can get a sense of cautiously shorting (downside protection). The upside is greater than the downside, but it may take longer to get there ($35k) and there could be one last correction.

• The options market suggests put prices getting more expensive relative to calls (1m 25D Skew increasing), and deribit shows increased call selling and put spreads executed. All signs of a cautiously short market.