Summary first: I think On-chain data is useful for long-term market direction, and
Derivarives market is helpful for short-term market direction.
I've been participating in the crypto market during the last 8 years, and this year, I feel like the market is doing weirdly.
When I held futures positions, I got liquidated many times. Even though I went over On-chain data, and realized it's not a bubble yet, the crypto matket has always reacted in bearish.
So, I thought the main reason was the persistently high interest rates and lack of the liquidity. But when I read some posts about BTC(Bitcoin) liquidation map on X, I came to think that the crypto market might be affected by the derivatives market.
I even compared trading volume between Spot and Derivatives, the Derivatives market is much bigger than the spot market.
Take a look at the BTC exchange liquidation chart for futures, cumulative short liquidation leverage is much more than long.
I guess the meaning of a specific position is more than other, it can be prey for institutions 😋
Additionally, I used to trade options on Binance exchange for a while. Getting a hint from the liquidation map, the size of Call Options OI(Open Interest) is more than Put.
Thus, it seems that options traders are looking forward to $100k in BTC, even though BTC collapses for a short time.
Therefore, based on this situation, I carefully expect that BTC price would be able to break $100k around this Christmas. (NFA: Not Financial Advice)
Anyways, my conclusion is.. long-term crypto investors should go over not only on-chain data but also derivatives market data.
Who is a gold XAUSD trader here? I have something to share
I don't know