However, there was good news yesterday that could have boosted cryptocurrencies: gold climbed more than 1.6% this Wednesday, as the retreat of the dollar and the geopolitical tensions around Ukraine increased the attractiveness of bullion as a haven, which caused a rally of up to almost 6% in precious metals
Gold, like Bitcoin, was consolidated during 2021 as a refuge asset. The fall of the dollar also favored a more favorable situation for cryptocurrencies.
Up from 60%?
A technical analysis revealed by Cointelegraph describes the three reasons why Bitcoin could experience a short-term rally. “There are a lot of similarities to September 2021, just before Bitcoin broke $45,000 and started a 62% rally. Firstly, the current 3-month Bitcoin futures premium stands at 6.5% and the indicator wavered recently between 9% and 11%, which reflects mild optimism,” said analyst Marcel Pechman.
Unexpected positive market moves happen when investors least expect it and this is precisely the scenario that is playing out right now. To confirm if this movement was instrument specific, the option markets should also be analyzed. The 25% delta bias compares equivalent call and put options. The indicator will turn positive when “fear” prevails because the protective premium of put options is higher than call options.
The opposite occurs when market makers are bullish, causing the 25% delta bias to shift into the negative area. Readings between 8% negative and 8% positive are generally considered neutral. The 25% delta bias hovered close to 10% at the end of September 2021, indicating distress on the part of option traders. Market makers and arbitrage desks were overcharging for protective short (bearish) positions.
However, on January 10, the metric touched the positive threshold of 8%, indicating a slight downtrend. Derivatives metrics show that current market conditions resemble late September when Bitcoin reversed a 24-day downtrend and started a 62% rally in the following three weeks. Could the phenomenon be repeated?
Source From: Ambito
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