First Mover: As Bitcoin Prices Fall, Traders Are Buying More Downside Protection
  Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets April 20, 2021 Sponsored by  (Price data as of April 20 @11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.
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Market Moves by Omkar Godbole  As Bitcoin Prices Fall, Traders Are Buying More Downside Protection
Bitcoin's short-term put options (bearish bets) are drawing higher prices than calls (bullish bets) in a sign of increased demand for downside protection in the wake of the cryptocurrency's recent drop to three-week lows.
According to data provider Skew, the one-week put-call skew has jumped to 26%, the highest since Oct. 2, and the one-month gauge has risen to a three-week high of 8%.
Put-call skews measures the value of puts relative to that of calls. In plain English, a positive skew implies that demand for puts is outstripping calls and vice versa.
That said, the positive one-week and one-month skews do not necessarily mean that traders have turned bearish on the cryptocurrency. They could be buying "protective puts" – purchasing puts against long positions in the spot or futures market.
 Bitcoin: One-week put-call skew (Source: Skew) Some institutions bought Sunday's price dip to $51,248 and may have added protective puts, causing a bump in put-call skews. The one-week gauge has increased from roughly 6% since Sunday.
Sunday's price drop happened after disruptions at coal plants in Xinjiang and other parts of China in the second half of last week knocked out bitcoin miners in the region, crashing the hash rate or the computing power by 46% to 106 exa hashes per second.
While the narrative that prices follow the hash rate is debatable, some funds track the hash rate. Miners, whose profitability is heavily influenced by price gyrations, may have bought puts on fears that these funds may sell, leading to a more profound decline in prices.
The decline in the hash rate was very pronounced over the last week and could have easily triggered some selling if algo funds were at a tipping point already due to other factors.
 Bitcoin put-call skews (Source: Skew) While demand for short-term puts has spiked, the long-term put-call skews remain well below zero, indicating continued bias for calls.
Read the original story here: As Bitcoin Prices Fall, Traders Are Buying More Downside Protection
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Technician's Take by Damanick Dantes Bitcoin Holds Support Around $53K; Resistance Zone Within Reach Bitcoin (BTC) held short-term support around $53,000 and is now approaching resistance around $58,000-$59,000. Buyers are entering after a near 15% selloff triggered oversold readings during the weekend. The cryptocurrency was trading around $56,000 at press time.
Chart shows BTC drawdown (percent decline from peak to trough) (Source: Koyfin)
 Hourly BTC chart shows support and resistance levels (Source: TradingView)
Original story found here: Bitcoin Holds Support Around $53K; Resistance Zone Within Reach
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ICYMI In case you missed it, here's the most recent episode of "First Mover" on CoinDesk TV:
Bitcoin, Ether Recovering from Nosedive: What Happened? Bitcoin plunged to three-week lows yesterday during Asia hours amid rumors of a U.S. regulatory crackdown. Is there any truth to those rumors? Did the drop have more to do with a power outage in China, or was it something else? "First Mover" reviews the possible reasons with CoinDesk's regulatory expert Nikhilesh De. Also, Perianne Boring of the Chamber of Digital Commerce shares what she knows about regulatory news from Washington and a look at the markets today with Peter Hans of Arca. Plus, meet Kevin Roose, the New York Times columnist, who made history selling his column as an NFT.
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