Bitcoin (BTC) faced a challenging August, plummeting over 13% to around $50,000 within the first five days. Despite this significant drop, key indicators hint at a possible rebound.
Long-term Options Skew Remains Bullish
One encouraging sign comes from bitcoin options on Deribit. The 180-day call-put skew remains above 3, indicating a long-term bullish outlook.
- Call Options: These allow the holder to buy bitcoin at a specific price later, representing a bullish bet.
- Put Options: These allow the holder to sell bitcoin at a specific price, representing a bearish bet.
- Options Skew: This measures the demand for call vs. put options. A positive skew indicates stronger demand for calls, suggesting optimism about future prices.
Despite the recent drop, the positive long-term pricing reflects confidence that bitcoin will recover once market volatility subsides.
Expert Insights
Analysts from LondonCryptoClub believe the U.S. economic slowdown will force the Federal Reserve to cut rates more aggressively, which is bullish for bitcoin. They also highlight China’s stimulus efforts and a weaker dollar as factors that will enhance global liquidity, benefiting bitcoin.
Cumulative Volume Delta (CVD) Suggests Dip-Buying on U.S. Exchanges
The recent sell-off saw significant dip-buying activity on U.S. exchanges like Coinbase, Gemini, and Kraken, as shown by the cumulative volume delta (CVD).
- CVD Explained: CVD measures the difference between the volume of buy and sell trades over time. A rising positive CVD indicates more buying than selling.
- Recent Trends: Since August 1, CVD on major U.S. exchanges has remained positive, suggesting net buying pressure and bargain hunting during price drops.
Kaiko’s analysis noted that while offshore exchanges like Binance and OKX experienced strong selling, U.S. platforms saw continued buying, indicating investor confidence in a rebound.
Conclusion
While Bitcoin’s August drop was steep, key indicators like long-term options skew and CVD on U.S. exchanges suggest potential for recovery. Investors are advised to stay informed and consider the long-term outlook.
