CME Bitcoin futures see record discount amid 'very bearish sentiment'

cointelegraph.com:

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.

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.

“Overall, the current futures basis sits at levels only experienced briefly during the June crash,” Arcane confirmed, adding that the data is “indicative of a very bearish sentiment among futures traders.”

More discouraging figures come from CME Group’s front-month futures contract price.

Beating out prior lows from July 2021, those contracts now trade at their biggest-ever discount to spot price.

“Overall, CME’s futures have tended to trade at a discount in the last two months but saw a solid short-lived recovery during the early August strength in the market,” the report continued.

Arcane argued that “structural effects” within the derivatives market could go some way to explaining the behavior, but that “worsening liquidity or general de-risking” were both still a risk.

“While BTC derivatives might signal a climate ripe for a short squeeze, the choppy trading range alongside global market turmoil speaks in favor of conservative positioning and gradual accumulation in the spot