Several signals suggest that the crypto sell-off is getting overextended in the short term. Further, long-term metrics indicate that the time is ripe to initiate a more aggressive incremental BTC accumulation strategy, despite the horrendous macro backdrop.
Futures trade in backwardation, and funding rates have stayed negative for two weeks. Additionally, perp open interest is on a vertical trend in notional terms, sitting at all-time highs. The hedging train is going full throttle. Further, the short BTC ETF exposure has reached a new all-time high, while long ETFs experiences outflows. Not included in this report, but also worth mentioning: options skew still suggest that a majority of BTC options traders are focused on downside protection. Everyone is hedging, and the short-trade seems crowded when gauged through historical lenses.