The price of Bitcoin (BTC) fell 3.6% to $26,900 after Binance and CEO Changpeng “CZ” Zhao were sued by the United States Commodity Futures Trading Commission on March 27. To date, Binance has been investigated by the CFTC, Securities and Exchange Commission, the Internal Revenue Service and federal prosecutors.
The Bitcoin price correction may have been limited due to Silicon Valley bank’s successful asset sale to First Citizens BancShares at a $16.5 billion discount, which received an extraordinary credit line from the Federal Deposit Insurance Corporation to compensate for potential future losses.
Oil prices also increased by 5% on March 27 after Russian President Vladimir Putin escalated geopolitical tensions in Europe. As reported by Investing.com, Russia plans to station tactical nuclear weapons in neighboring Belarus, in a move designed to intimidate opposing countries over their support for Ukraine.
Further tension from the crypto industry arose after a U.S. Federal Judge decided to temporarily halt the proposed sale of Voyager Digital to Binance.US. on March 27. Judge Jennifer Rearden of the U.S. District Court in New York granted the request for an emergency stay.
Let’s examine Bitcoin derivatives metrics to determine the current market position of professional traders.
Bitcoin futures show no impact from the CFTC–Binance case
Bitcoin quarterly futures are popular among whales and arbitrage desks, which typically trade at a slight premium to spot markets, indicating that sellers are asking for more money to delay settlement for a longer period.
As a result, futures contracts on healthy markets should trade at a 5%–10% annualized premium — a situation known as contango, which is not unique to crypto markets.
Bitcoin 2-month futures annualized premium. Source: Laevitas
The Binance news had no effect on the Bitcoin futures premium, despite the fact that the exchange holds 33% of the $11.2 billion open interest. The two-month contract premium is 3.5%, which is less than the neutral 5% threshold. Had there been some panic selling using leverage futures contracts, the indicator would have quickly moved…