FxWirePro- Major Crypto levels and bias summary 
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The recent WTI crude oil price has been dramatically plunging since the beginning of the year, having tumbled from $60 levels per barrel to the prevailing $11 per barrel, a decline of 80% (refer 1st chart).
The price of the Western Texas Intermediate (WTI) Crude Oil futures of May months deliveries (ticker symbol: CLK2020) slid below US$0 per barrel on 21st of, and reached a low of US$-37.63 a barrel.
Bitcoin price has been drifting in sideways from the last couple of days, BTCUSD (at Coinbase) is actually bouncing back from the lows of $3,858 levels to the recent highs of $7,300 levels (refer 2nd chart).
Crude oil and bitcoin have had multiple instances where price action was correlated. However, as shown in the above charts, the price of bitcoin hasn’t replicated that of the WTI crude oil during the crash. Technically, Hammer takes-off rallies above DMAs with bullish crossovers, currently, the minor trend drifting in sideways.
The flash crash of the CLK2020 futures contract was a result of the contract expiring the next day. The WTI crude oil futures (CL) contracts are physically delivered, meaning that at the expiry of the contract, the holders of the contracts have to take physical delivery of the underlying asset, in this case, crude oil.
Since the end of February, stockpiles of crude oil at Cushing in Oklahoma, the main storage hub and delivery point for the CL contract, have increased by 48% to 55 million barrels. Oil traders that had contracts expiring on the 22nd were selling at whatever price they could get, as most did not have the ability to take physical delivery of the crude oil. This lead to the price of CLK2020 trading below US$0.
Whilst paying someone to take crude oil initially appears unintuitive, for many traders the cost of taking delivery and storing the crude oil without a confirmed buyer would have been higher than paying another party to take it. Each futures contract represents 1,000 barrels of crude oil, and over 154,000 of these contracts were traded yesterday.
Contemplating all these factors, we’ve accurately positioned our hedging perspectives using short hedge in WTI crude and boundary options and long hedges have been advocated for BTC. Well, they’ve bene functioning appropriately as per the expectations so far.
