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Bitcoin dives below $19k, data indicates bulls unwilling to add leverage longs

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BTC took a dive on September 6th as market data has shown traders skepticism over a quick BTC recovery.

From $19,820 to $18,960 in less than two hours on the day,  this steep drop from BTC was the deciding factor in a series of futures liquidations, totalling $74 million. At $18,746 at the time of writing, this is the lowest BTC has been since June. 

A 2% jump happened in the morning of September 6, yet the Bitcoin quickly lost that traction, derailing to $19,800 within the span of an hour. Ethereum has seen a 7% increase in the past 48 hours. 

However, On September 6 , ETH dropped by 5.6%, higher in percentage than BTCs on-the-day losses at just 3.8%. Since August 27 as  result of the Powell speech and the 1.25 trillion in US stock losses. Powell stated that larger interest rates were highly likely, which led to an S&P  close at 3.4% on that day. 

Other retail traders have usually been those to avoid futures because of the difference from spot markets. However, they are still generally useful to traders, preventing fluctuation in funding rates  in perpetual futures contracts. 

Healthy markets are indicated by a 4% to 8% annualized premium that covers costs and associated risks. BTC premiums have remained below 3% for the entirety of that time, indicating apprehension  to add bullish momentum. 

Bear markets typically see investors give higher odds for price dumps, which cause the skew indicator to increase over 12%. Bullish markets will typically see a minus 12%, discounting options. 

The thirty-day delta skew was over 12% since September 1, indicating that options traders were not so confident about downside protection. The two metrics also indicate that the price dump on September 6 may have been expected, as some traders foretold. 

To contrast, August 18 saw Bitcoin drop by $2,500, which caused bullish liquidations to reach $210 million. Bearish sentiment prevailing, this does not simply mean the continuation of a losing streak for BTC. Treading carefully during this time is imperative while whales and market markers are not as willing to add leverage longs and downside protection for options. 

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