Gamma

Bitcoin

Venus

As Bitcoin makes its audacious sprint towards the $35,000 mark, the crypto community stands divided, teetering on the edge of euphoria and skepticism.<a href="https://cointelegraph.com/news/bitcoin-price-chases-35-k-btc-derivatives-signals-fresh-inflow" rel="nofollow noopener" target="_blank"> </a> 
With a staggering 16.1% increase in value from October 22 to October 24, the prevailing sentiment on social media may have you believe we are on the cusp of a bull market renaissance. 
But, let’s dissect the derivatives data and cut through the hype to understand what is truly transpiring behind the scenes. 
<h2 class="wp-block-heading" id="unmasking-the-shorts-a-tale-of-liquidation">Unmasking the Shorts: A Tale of Liquidation</h2> 
Amidst this tumultuous rally, futures contracts traders on the bearish end of the spectrum found themselves in a whirlwind of liquidations, with losses amounting to $230 million. 
A noteworthy deviation in Bitcoin’s open interest unfolded, highlighting a total number of futures contracts in play and indicating that short-sellers were blindsided, yet not caught in a web of excessive leverage. 
In the heat of the rally, Bitcoin futures open interest swelled from $13.1 billion to a substantial $14 billion. This contrasts starkly with the events of August 17, when a 9.2% price plummet in a mere 36 hours led to $416 million in long liquidations. 
During that chaotic episode, Bitcoin’s futures open interest shrunk from $12 billion to $11.3 billion. The current scenario fortifies the gamma squeeze hypothesis circulating in the market, suggesting market makers found themselves in a chase against stop losses. 
<h2 class="wp-block-heading" id="deciphering-the-theories-cz-s-alleged-maneuvers-and-gamma-squeeze">Deciphering the Theories: CZ’s Alleged Maneuvers and Gamma Squeeze</h2> 
Bitcoin, in its enigmatic glory, has sparked various theories attempting to explain its price movements. 
A user named M4573RCH on a certain social network has thrown in a wild card, insinuating that Changpeng “CZ” Zhao might have orchestrated a strategic play using BNB as collateral on Venus Protocol, a decentralized finance platform. 
The speculated maneuver involved selling Bitcoin to bolster <a href="https://www.cryptopolitan.com/binance-coin-price-prediction/" data-type="post" data-id="119696">BNB’s</a> price, subsequently buying back Bitcoin with BNB to recalibrate the positions. 
However, these speculations, much like the intricate gamma squeeze narrative, remain unverified conjectures, with the market’s entities shrouded in mystery. 
<h2 class="wp-block-heading" id="derivatives-data-decoding-the-bull-run-s-health">Derivatives Data: Decoding the Bull Run’s Health</h2> 
To gauge the health of this unexpected bull run, a deep dive into Bitcoin derivatives metrics is imperative. Typically, Bitcoin monthly futures exhibit a 5% to 10% annualized premium compared to spot markets, a testament to the sellers’ demand for additional compensation to delay settlement. 
On October 24, the futures premium hit a commendable 9.5%, the highest in over a year, breaking the 5% neutral threshold and ending a 9-week bearish dominance. 
A glance at the Bitcoin options markets sheds light on the traders’ sentiments and expectations. The delta 25% skew, a critical indicator, shifts to positive territory during bearish anticipation and dips below negative 7% amidst bullish fervor. 
From a neutral stance on October 19, it plummeted to -18% on October 22, signaling extreme optimism. However, it currently hovers at -7%, indicating a balanced demand between call (buy) and put (sell) options, and allaying fears of excessive leverage. 
Bitcoin’s journey to $35,000 is laden with speculation, intrigue, and a plethora of theories. 
Despite the rampant speculation, particularly regarding the approval of a spot Bitcoin ETF, the derivatives data paints a picture of a healthy market, teeming with fresh funds and justifying aspirations for a rally beyond the $35,000 threshold. 
As we navigate these tumultuous waters, it is crucial to remain grounded, critical, and vigilant, ensuring that we separate the signal from the noise in this high-stakes crypto odyssey.

Bitcoin’s charge to $35k: What derivatives data tells us

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