Quant Explains How Bitcoin Derivatives Data Can Be Used For Trading

Name	Symbol	Market	Market Cap ($)	Algorithm
Quant	QNTUSD	Crypto	1,509,394,602	Not Mineable

Name

Symbol

Market

Market Cap ($)

Algorithm

Quant

QNTUSD

Crypto

1,509,394,602

Not Mineable

	Price Change	Price Change %	Current Price	Bid Price	Offer
	2.33	2.29%	103.95	103.86	103.93

Price Change

Price Change %

Current Price

Bid Price

Offer

2.33

2.29%

103.95

103.86

103.93

High Price	Low Price	Open Price	Prev. Close	52 Week Range
104.04	101.11	101.54	101.62	83.10 - 153.83

High Price

Low Price

Open Price

Prev. Close

52 Week Range

104.04

101.11

101.54

101.62

83.10 - 153.83

Exchange	Last Trade	Size	Trade Price	Currency
GDAX	05:19:42	0.047000	103.94	USD

Exchange

Last Trade

Size

Trade Price

Currency

GDAX

05:19:42

0.047000

103.94

USD

Price x Volume	Volume	Base Symbol	Related Pairs
334,103.26	3,252.35	QNT	QNTEUR	QNTGBP	QNTBTC

Price x Volume

Volume

Base Symbol

Related Pairs

334,103.26

3,252.35

Quant Explains How Bitcoin Derivatives Data Can Be Used For Trading

15/02/2023 12:30pm

NEWSBTC

A quant has explained how the data of the Bitcoin derivatives indicators like open interest and liquidations can be leveraged as a short-term trading tool. Bitcoin Derivatives Market Data As A Short-Term Trading Tool As explained by an analyst in a CryptoQuant post, yesterday’s price action was a good example of how the futures market influences the value of the cryptocurrency. There are two relevant indicators here. The first is the “open interest,” which measures the total amount of Bitcoin futures contracts that are currently open on all derivative exchanges. When the value of this metric trends up, it means investors are opening up more contracts on the futures market currently. Since more contracts generally accompany increased leverage as well, the open interest going up can cause a higher amount of volatility for the BTC price. On the other hand, decreasing values of the indicators imply holders are closing up their contracts or getting forcefully liquidated right now. As this naturally leads to lower leverage in the market, BTC could follow up with less volatility. The other metric of interest here is the “long/short liquidations,” which measures the total amount of long/short contracts (in USD) that are being forcefully closed off by exchanges as a result of investors accumulating losses that have eaten away a specific percentage of their collateral. Related Reading: Here’s What’s Needed For The Bitcoin Rally To Resume Now, here is a chart that shows the zoomed-in trend of the Bitcoin open interest and futures liquidations, as well as the BTC price, during the action seen yesterday: How the activity in the futures market has resulted in the price action seen yesterday | Source: CryptoQuant In the above graph, the quant has marked how the Bitcoin open interest and futures liquidations (both long and short) related to the price of the cryptocurrency through each portion of yesterday’s burst of price action. At first, the price was going down, but the open interest was increasing in value, suggesting that short positions were piling up on the market. Then, in a sudden upwards price move, a large amount of these shorts were liquidated, which only fueled the price surge further. Related Reading: Ethereum Exchange Supply Has Fallen 37% Post Merge: Santiment Naturally, the open interest declined as this move took place, because of all the short liquidations. After this steep climb, the price fell back to sideways movement, but the open interest started climbing. The analyst notes that this suggests investors had begun to open up long positions because of FOMO induced by the sudden rise. Finally, the Bitcoin price reversed its direction, resulting in these now piled-up longs getting liquidated in the same way as shorts did earlier, which again only amplified the move and caused BTC to see an extended drawdown. BTC Price At the time of writing, Bitcoin is trading around $22,100, down 4% in the last week. BTC continues to be stuck in a range | Source: BTCUSD on TradingView Featured image from Traxer on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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