Bitcoin Marks Swift Recovery From Recent Crash - But Why Are Traders Worried?
2021-05-06 | Mike Hallen
Bitcoin traders appear cautious about the sustainability of the crypto asset’s swift recovery after Tuesday’s low of $53k.
The leading cryptocurrency jumped 8% earlier on Wednesday, erasing Tuesday's slide from $57k to $53k, as the United States Treasury Secretary Janet Yellen backtracked on comments suggesting the
rate of interest hikes
could also be required
to prevent the economy from overheating.
Bitcoin [
BTC] is presently trading around $58k, representing a 21% gain on lows near $48k seen at
the end of April,
consistent with CoinMarketCap.
The recovery, however, has
did not subdue fears of a deeper
market correction. The one-week put-call skew remains entrenched
within the positive territory for the third straight week within a sign of persistent demand for short-term put options or bearish bets.
Traders look to be buying "protective puts" – purchasing puts against long bitcoin positions within the spot or
futures exchange.
The put-call skew
is a gauge of
the worth of puts relative to calls; a positive skew implies that demand for puts [bearish options bets] is outstripping calls [bullish bets].
The one-week put-call skew is presently hovering near 9%, having turned positive with bitcoin's drop from $60k to sub-$50k
within the last half of April.
However,
the choices market continues
to point out long-term bull run with three- and six-month skews returning negative values. The one-month gauge is now hovering near zero.
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