Glassnode warns of market liquidity pressure: Bitcoin three-month futures basis hits historically rare low level

Odaily News: On-chain analysis firm Glassnode stated that the yield on Bitcoin's three-month futures basis has been lower than the yield on two-year U.S. Treasury bonds since February this year, and this trend has now persisted for several months.

Glassnode pointed out that there has been only one similar occurrence in history where the duration came close to the current one — the period from August 2022 to January 2023, which ultimately corresponded to the cycle low of the previous market.

The firm stated that the prolonged slump in futures basis not only reflects weak market leverage demand, but also directly affects the overall depth and trading volume of the market.

Analysts believe that futures basis is commonly used to gauge market risk appetite and demand for arbitrage capital. When the basis yield falls below the risk-free rate, it indicates that investors are earning insufficient additional returns for taking on risk through holding Bitcoin futures, which may lead to reduced capital inflows into the futures market, thereby impacting liquidity and trading activity.