At the time of writing, Bitcoin was priced at around $ 7,889 after attempting to surpass $ 8,000 on March 10. The move below $ 9,000 on March 6 has triggered panic in the market and the current situation makes matters a bit worse than expected.
With the halving of Bitcoin just after 8 weeks, the community is seriously considering the impact of Corona virus, especially on Bitcoin miners.
According to one analysis Recently launched by Messari's Ryan Selkis, the upcoming third halving could cause miners not only to face margin pressure due to reduced supply but also to liquidity stress caused by COVID-19. Considering the above situation, the aftermath is huge for the mining community.
Source: Messari
The chart above shows the different scenarios of Bitcoin pullback after halving which is expected to materialize due to the hashrate increase. Increasing the hashrate directly shows that many miners are competing to mine Bitcoin blocks before halving. The report says:
“So many, so much The miner may be competing because a small pool of industry revenue. "
In a halving event, usually only the strongest and most profitable miners survive because of the abundant resources. Other miners who keep the leverage too high will incur large costs because their competitiveness is not strong enough against rich players.
BTC / USD | Source: Trading View
However, in the past, that was not a big deal. According to the chart above, it can be seen that after halving, Bitcoin is always looking to skyrocket in the long run after noting a small slip. While the price movement after halving Bitcoin 1 and 2 has verified the above statement, the global financial market is currently plummeting because Corona virus creates uncertainty for what can happen.
If the miners can't cope with the liquidity crisis caused by COVID-19, they can stop working and the hash rate will drop.
Although the hash rate does not determine the price, the hash rate incident that can end the king coin's uptrend has been built since the beginning of the year.
Overall, the entire financial market is at a critical stage at the moment, but maybe the Bitcoin miner wants to halving a little longer delay.
Bitcoin projections ant will be further reduced when Put / Call ratio spike
On March 9, the price of the world's largest cryptocurrency dropped to its lowest level in more than 2 months, losing more than 20% from its 2020 high. Decreased regularly for Bitcoin markets but extending this fall has drawn a boring story.
The maturity of cryptocurrency derivatives helps to predict market sentiment and with leading exchanges regularly generating volumes of more than $ 1 billion, the cryptocurrency market is in the mixed sector. Copper is a measure of the future effectiveness of psychology.
According to data from Skew markets, the Put / Call ratio of Bitcoin option contract has reached 1.42, the highest level since mid-December, when the price was at $ 7,200, 8% lower than the price. at the time of writing. The Put / Call ratio not only reached a high of nearly 3 months, but also surpassed 1, showing that Put option contracts were superior to Call option contracts.
Ratio Put / Call Contract of BTC option Source: skew
Option contracts are the only risk-sensitive product in the derivative market because it allows traders to opt into positions based on the market's development trends. This option can be on either the buy side or the sell side.
Put option rights holder; otherwise, calling options gives options. As a result, the Put / Call ratio indicates the option option sale traded in the market that has the option option, which describes how the asset's impending price change will occur.
Because the Put / Call Bitcoin ratio is currently greater than 1, there are more traders who choose a contract with a sell right than a call option. As a result, the number of traders choosing a call option has decreased, when compared to the traders who chose the option.
This figure increased significantly, from 0.62 on March 6, to 1.28 a day later, when prices fell 2.78% on the day. The possibility of price decline in the next few days is a testament to the collapse of psychology of options traders. Since March 7, the price has dropped by more than 12% and continues to drop at the time of writing.
OI BTC Futures | Source: skew
Contract options are not the only leading indicators that show the bearish sentiment in the derivatives market. Since March 6, OI Bitcoin Futures has also witnessed a significant decline, with the number of transactions plummeting on March 9. Futures market OI dropped more than $ 400 million, as traders closed positions and quickly left.
You can see the price of BTC here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Minh Anh
Bitcoin Magazine
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