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Market Moves: Traders Opting for Cash and Carry Strategy as Bitcoin’s ‘Contango’ Widens
Technician's Take: Bitcoin Struggles Near $60K; Short-Term Support Around $58K

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Cardano (ADA): +6.2%
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EOS (EOS): -4.1%

The CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20. These assets constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges.

Traders Opting for Cash and Carry Strategy as Bitcoin’s ‘Contango’ Widens

Savvy traders are locking returns of over 40% in the wake of bitcoin (BTC)‘s widening contango – the spread between prices in futures and spot markets, also known as futures basis/premium.

“With the premium on bitcoin futures expanding to as high as 40% per annum for the June expiry, there is a lot of interest from cash and carry traders to arbitrage the premium and lock-in risk-free gains,” Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, told CoinDesk in a WhatsApp chat.

Cash and carry arbitrage is a market-neutral strategy aimed to profit from price discrepancies in one or more markets.

It involves buying an asset in the spot market against a short position in the futures market when the futures draw a significant premium relative to the spot price. That way, traders pocket a fixed return, as the premium decays over time and converges with the spot price on the expiry date.

Bitcoin futures basis (Source: Skew)

According to data source Skew, bitcoin’s June expiry futures listed on major exchanges such as Binance, Huobi, OKEx, BitMEX, and Deribit are currently drawing an annualized premium of 44% to 48%. Meanwhile, those listed on the Delta Exchange are trading at a premium of 30%.

So, a carry trade taken now will yield an annualized return of 44% to 48% – a number significantly higher than interest rates on crypto deposits offered by lending platforms such as Genesis and BlockFi or government bond yields in emerging economies.

CoinDesk 20 data shows bitcoin broke out of a multi-week consolidation early Saturday with a sudden $3,000 rise to $61,065. Futures premium on major exchanges increased along with the spot market price, rising from roughly 32% to over 40%.

However, market chatter shows growing concerns regarding the uptick in perpetual futures funding rate – the cost of holding long positions calculated and paid every eight hours.

Read the original story here:

Traders Opting for Cash and Carry Strategy as Bitcoin’s ‘Contango’ Widens

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Bitcoin Struggles Near $60K; Short-Term Support Around $58K

Over the weekend, bitcoin (BTC) tested resistance around $61,000 twice before sellers gained control. Bitcoin’s struggle near its all-time high has been a consistent theme since February as the uptrend consolidates. Initial support is around $58,000 on the four-hour chart.

Four-hour BTC chart shows all-time high resistance with lower support levels and RSI (Source: TradingView)

BTC held support around $50,000 on March 25 after retracing nearly 50% of its rally from the February 28 price low.
Since then, BTC’s near 19% rally has stabilized, breaking above a series of lower price highs from April 1 and holding support from the 200-period moving average.
The cryptocurrency is now overbought, defined by its relative strength index (RSI) on the four-hour chart.
Previous overbought signals have preceded 5%-10% declines over the past month and have all occurred near $58,000-$60,000 resistance areas.
A decisive break above $60,000 is needed to reignite the broader uptrend. For now, short-term buyers remain active at higher support levels since February.

Original story found here:
Bitcoin Struggles Near $60K; Short-Term Support Around $58K

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Crypto Markets and Taxes; Meltem Demirors on Crypto Climate Accord, Coinbase and More

Crypto influencer Meltem Demirors of CoinShares explains the Crypto Climate Accord that CoinShares joined along with Ripple and ConsenSys, and how they plan to convince the entire cryptocurrency industry to use renewable energy. Plus, Tim Frost of Yield App joins our markets discussion with a closer look at DeFi, and Pierre Accounting CEO Eric Pierre with tax-related information and news. Are accountants seeing signs of cryptocurrencies going mainstream?

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Investor Momentum to NFT Boom: CoinDesk Research's Quarterly Review

Introducing CoinDesk Research's quarterly review, covering the main developments over the first three months of 2021 in Bitcoin, Ethereum, DeFi, stablecoins and – of course – NFTs.

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