Jamie Coutts CMT
Jamie Coutts CMT 2 minutes reading from Bitcoin

Wet vs. Futures: Bitcoin’s Forecast for Futures

BTC bear cycles tend to start on a leveraged wipeout (purple) followed by a capitulation dump (red). 🧵

As futures trading dominated with the influx of insto capital at 2021 peak Realized Losses (RL) didn't spike as expected.

Instead, the futures mkt took the reigns from spot and perps went from zero to 16B in Open interest in 2Q21.

Then came the leveraged wipeout. This was the real top in Bitcoin (not Nov) as all the momentum leaked out.

With OI at 5b perps are not influencing the price cycle as much (a good thing). In the past 6mths we have seen the 2nd & 5th largest on-chain losses (measured as a % of Mkt cap) after the debacles of crypto intermediaries.

1. Large RL spikes at this stage are indicative of late-cycle capitulation.

2. The fact we have seen 2 this cycle tells us that this is the most destructive cycle

So Wen Bottom? only in hindsight can we know. Applying technical analysis to understand trend is key. Currently, all my trend models over diff timeframes are 🔽. When they rotate back into positive (green) after capitulation events, then probability⬆️of a new bullcycle.

This post is based on this twitter thread.


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