Decentral Block Post

Bitcoin (BTC) futures are starting to see record discounts as sentiment among derivatives traders worsens. 

In its latest dedicated report issued Aug. 23, analysis firm Arcane Research painted a worrying picture of morale among BTC futures participants.

Futures basis revisits June lows

After an initial shock during June’s BTC price drop, which has since held as a macro bottom, Bitcoin derivatives have not been the same.

After an initial bounce, metrics are trending downwards, and this month are challenging records.

Futures basis — the difference between futures contract prices and the Bitcoin spot price — is already back at lows only seen during June’s dip to $17,600. The move came thanks to last week’s sudden sell-off on BTC/USD, which resulted in multiple visits below the $21,000 mark.

Bitcoin (BTC) fell to daily lows on Aug. 26 as market nerves heightened into new macro triggers.

Pre-Fed blues hit BTC markets

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to $21,332 on Bitstamp ahead of fresh commentary from Jerome Powell, Chair of the United States Federal Reserve.

Part of the Fed’s Jackson Hole annual symposium, Powell was set to deliver a speech on the day that spectators hoped would provide new cues on economic policy going forward.

With U.S. Consumer Price Index (CPI) inflation slowing since June, interest remained high over the extent of key interest rate hikes in September.

Summarizing the current economic situation in the U.S., macro analyst David Hunter argued that the Fed would have no choice but to change course before the end of the year.

The founder of decentralized finance (DeFi) protocol Synthetix, Kain Warwick, has submitted a proposal that would turn off very high yield returns for SNX stakers and cap the total SNX token supply at 300 million. 

The Synthetix protocol allows traders to issue synthetic versions of crypto native assets, traditional financial assets, and commodities on the Ethereum and Optimism networks.

In an Aug. 25 Synthetix Improvement Proposal (SIP) Warwick explained that SNX reward inflation was initially intended to “bootstrap the network”, however, he believes it’s no longer necessary as they can generate sustainable fee yields from atomic swaps.

A big rise in fee revenue has been a result of DeFi protocols 1inch and Curve starting to use the Synthetix platform to conduct atomic swaps, bringing in more traffic to the protocol. In June the protocol surpassed $1 million in daily fees - which was four times the amount Bitcoin was making. 

According to cryptofees, Synthetix is currently taking a seven-day average of $158,857 in fees, which is a little bit below Bitcoin’s seven-day average of $222,651.

As a market crash takes place, assets become oversold and typically there’s an “oversold bounce,” “return to mean,” “mean reversion,” or some price snapback to the bottom of the pre-crash range. 

Afterward, the asset under study either consolidates, continues the downtrend, or returns to the bullish uptrend if the downside catalyst was not significant enough to break the market structure. That’s all kind of basic trading 101.

This week Cosmos (ATOM) price appears to be following this path and the altcoin is showing a bit of strength with a 35% gain since Aug. 22, but why?

Depending on how you look at it, and technical analysis is by all means a subjective process, ATOM price is either in an ascending channel or one could say a rounding bottom pattern is present with price close to breaking above the neckline.

Resistance above $13 (the horizontal black line in the bottom chart) is currently close to being tested and with sufficient volume and “stability” from the wider crypto-market, the price could be en-route to the 200-day moving average at $17.20.