4,700 USD in Bitcoin (Bitcoin) The price surge on November 29 may be a great relief for holders, but it seems too early to judge the bottom based on derivative indicators.
This shouldn’t be surprising, as the Bitcoin price is still 15% below the all-time high of $69,000 set on November 10. Just 15 days later, the cryptocurrency tested the $53,500 support level after a sudden 22% correction.
Today’s trend reversal may be encouraged by the following factors Micro-strategic It was announced on Monday that it had acquired 7,002 bitcoins at an average price of $59,187 each. The listed company raised funds by selling 571,001 shares between October 1 and November 29, raising a total of US$414.4 million in cash.
After the German stock market operator Deutsche Börse announced its listing, more positive news came Invesco physical bitcoin Exchange-traded bills or ETN. The new product will be traded under the ticker symbol BTIC of the Deutsche Börse Xetra Digital Stock Exchange.
Data shows that professional traders are still neutrally bullish
To understand the positioning of professional traders who are bullish or bearish, one should analyze futures basis. This indicator is also called futures premium, and it measures the difference between futures contracts and the current spot market on conventional exchanges.
Bitcoin’s quarterly futures are the tool of choice for whales and arbitrage platforms. Although derivatives may seem complicated to retail traders due to settlement dates and price differences from the spot market, the most notorious benefit is the absence of fluctuating financing rates.
The annualized premium for three-month futures trading is usually 5%-15%, which is regarded as the opportunity cost of arbitrage trading. By delaying settlement, sellers demand higher prices, which leads to price differences.
Note the 9% bottom on November 27th because Bitcoin tested the support level of $56,500. Then, after rebounding above $58,000 on Monday, the indicator returned to a healthy level of 12%. Even with this movement, there is no sign of excitement, but the past few weeks cannot be described as a bearish period.
Provide more insights into the loan market
Margin trading allows investors to borrow cryptocurrencies to take advantage of their trading positions, thereby increasing returns. For example, you can borrow Tether to buy Bitcoin (USDT) To increase exposure. On the other hand, borrowing bitcoins can only be used to go short or bet on falling prices.
Unlike futures contracts, the balance between long and short margins does not necessarily match.
When the margin loan ratio is high, it indicates that the market is bullish. On the contrary, a low loan ratio indicates that the market is falling.
The chart above shows that traders have recently borrowed more bitcoins as the ratio dropped from 21.9 on November 26 to the current 11.3. However, the data is definitely bullish, as the indicator strongly supports stable currency lending.
Although Bitcoin has risen 9% from the low of $53,400 on November 28, derivatives data shows zero excitement among professional traders. Unlike retail traders, these experienced whales avoid FOMO, even though margin loan indicators show signs of over-optimism.
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