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Bitcoin Traders Are Shorting BTC at Its Peak – Here’s Why That’s Risky!
As Bitcoin (BTC) nears all-time highs, a peculiar phenomenon has been observed in the market. Despite the significant price increase, Bitcoin traders are shorting BTC, which is an unusual and potentially risky move.
To understand this behavior, it is essential to explore the concept of perpetual futures and the current market dynamics. Perpetual futures are a type of derivative contract that allows users to gain exposure to the market without having to worry about expiration dates. These contracts tend to trade at a premium during bullish markets, indicating traders’ willingness to pay more for leveraged exposure. In contrast, when these futures start trading at a discount, it can signal underlying tension in the market.
In recent days, Binance’s BTC Perpetual Futures have traded consistently $40-$50 below spot prices, despite Bitcoin hovering near its all-time high. This is a significant and unusual gap that mirrors past panic periods. The data shows that such deviations occurred during bear phases in the past, but this current backdrop is vastly different.
As reported by Alphractal, we can see the deepening of the negative gap over time.
Source: ambcrypto.com
