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Dormancy Flow: Assessing Bitcoin Value Through Coin Age and Money Movement
Dormancy Flow is an on-chain metric that evaluates Bitcoin's market cycles by analyzing the movement of older coins relative to the total market capitalization.
Average Coin Dormancy: Insights into Holding Behavior
Average coin dormancy measures how long spent coins remained inactive, revealing the behavior of long-term investors. High dormancy suggests older coins are moving, potentially signaling profit-taking or increased selling pressure.
Realized Profit Explained: When On-Chain Gains Are Realized
Realized profit refers to the actual financial gain or loss an investor experiences when they sell a cryptocurrency asset for a price different from its purchase price.
Net Unrealized Profit/Loss vs. Net Realized Profit/Loss
Understanding the distinction between unrealized and realized profit or loss is fundamental for any market participant.
Relative Unrealized Loss: A Capitulation Signal
Relative Unrealized Loss quantifies the aggregate 'paper losses' held by cryptocurrency investors, normalized against the total market capitalization.
SOPR Reset to 1: Understanding Its Role as a Support Level
The Spent Output Profit Ratio (SOPR) is an on-chain metric indicating whether market participants are selling at a profit or loss.
Short-Term Holder SOPR as a Market Sentiment Indicator
The Short-Term Holder Spent Output Profit Ratio (STH-SOPR) is an on-chain metric that reveals whether short-term Bitcoin investors are selling their holdings at a profit or a loss.
Realized Price Explained: The Average On-Chain Acquisition Cost
Realized Price is an on-chain metric that calculates the average price at which all cryptocurrency units last moved between wallets.
Funding Rate Arbitrage: Spot vs. Perpetual Futures
A funding rate arbitrage strategy involves simultaneously buying an asset on the spot market and shorting its perpetual futures contract to profit from funding payments.
Leverage and Maintenance Margin: The Mathematical Relationship
Leverage allows traders to amplify their market exposure using borrowed funds, while maintenance margin is the minimum equity required to keep a leveraged position open.
Tiered Maintenance Margin: Why Large Positions Require More Buffer
When trading with leverage, the maintenance margin is the minimum capital required to keep a position open.
Liquidation Price Recalculation After Leverage Adjustment
In leveraged trading, the liquidation price is where an exchange automatically closes a position due to insufficient collateral.
Understanding Crypto Futures Contract Specifications
Crypto futures contracts are agreements to buy or sell a cryptocurrency at a predetermined price on a future date, or perpetually.
Quanto Futures: Understanding Foreign Currency Settled Contracts
Quanto futures are a type of derivative contract where the underlying asset is denominated in one currency, but the contract is settled in another, fixed currency.
Delta as a Probability Proxy for In-the-Money Expiration
Delta, a key options Greek, can be interpreted as the approximate probability that an option will expire in-the-money. This metric helps traders assess the likelihood of an option retaining intrinsic value at its expiration date.
Estimating Probability of Profit in Options Strategies
Probability of Profit (PoP) is a metric used in options trading to estimate the likelihood that a specific options trade will be profitable at expiration.
Reading Option Payoff Diagrams
Option payoff diagrams visually represent the potential profit or loss of an options strategy at expiration across various underlying asset prices.
Insurance Fund Balance as an Indicator of Exchange Stability
An insurance fund balance on a crypto exchange serves as a critical protective measure, safeguarding traders against unexpected losses in leveraged trading.
Cross-Hedging Spot Holdings with Perpetual Futures
Cross-hedging with perpetual futures is a risk management strategy designed to protect the value of an investor's spot cryptocurrency holdings from adverse price movements.
Accounting for Funding Costs in a Holding Strategy
Funding rates are periodic payments exchanged between traders in perpetual futures contracts, designed to keep the contract price aligned with the underlying spot price.