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Bitcoin price stages a comeback as 3 indicators reflect BTC’s strength

The futures premium, top traders’ long-to-short ratio and options skew all signal that pro traders still feel positive about Bitcoin price.

Bitcoin (BTC) price is still 4.4% down from its Aug. 23 high at $50,500, leading some traders to question whether the local top marked the end of the recent 34-day long bull run.

Even with the current correction, derivatives data and the maneuvers of professional investors are not flashing any bearish signals.

Bitcoin price in USD at Coinbase. Source: TradingView

On Aug. 24, prominent technical analyst John Bollinger suggested that Bitcoin price could be pushed lower in the short term. A pseudonymous market analyst called 'CryptoHamster' shared a similar bearish outlook based on analyzing a technical pattern called an ascending channel.

Bearish news coming from exchange regulation could have also diminished investors' interest, and this week the United Kingdom's Financial Conduct Authority (FCA) released a supervisory notice against Binance exchange.

According to this week's regulatory action, the exchange was asked to take down its live advertisements and promotions on Binance's website and social media.

A bullish trend can be seen in futures markets

To assess whether professional traders became pessimistic, analysts should monitor the futures premium, also known as 'basis.' This indicator measures the price gap between futures prices and the regular spot market.

The one-month contract should trade with a 6% to 14% annualized premium in healthy markets because sellers demand a higher price to postpone settlement, creating a price difference.

Huobi 1-month futures basis. Source: Skew

Notice how the indicator has improved from a neutral-to-bearish 4% annualized premium on Aug. 19 to a more healthy 9% level. This shows that the metric is moving in the opposite direction of the zone, which would be considered bearish.

The top traders long-to-short ratio is still optimistic

To effectively measure how professional traders are positioned, investors should monitor the top traders' long-to-short ratio at leading crypto exchanges. This metric provides a broader view of the traders' effective net position by gathering data from multiple markets.

Top traders BTC long/short ratio. Source: Bybt.com

It is worth noting that exchanges gather data on top traders differently because there are multiple ways to measure a clients' net exposure. Therefore, any comparison between different providers should be made on percentage changes instead of absolute numbers.

Both OKEx and Huobi displayed an increase in the top traders' long-to-short ratio, indicating that either they closed short positions or opened long ones, which is a bullish move. Binance was the only exception because the indicator dropped, indicating some pessimism, but the variation over the past couple of days has been insignificant.

Options markets are slightly bullish

The 25% delta skew compares similar call (buy) and put (sell) options side-by-side. It will turn positive when the protective put options premium is higher than similar risk call options.

The opposite holds when market makers are bullish, and this causes the 25% delta skew indicator to enter the negative range.

Deribit Bitcoin options 25% delta skew. Source: laevitas.ch

The above chart shows that there had been some bearishness ahead of July 19, but Bitcoin options markets have flipped neutral since then. Moreover, there are no signs that professional traders are growing worried about a potential price drop because the 25% skew indicator remains near zero.

Both futures and options markets show confidence from investors despite the worrisome technical analysis and shaky regulatory scenario.

Consequently, at least according to derivatives markets, dips are for buying.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Here’s why Bitcoin bulls might trample $50K ahead of Friday’s $2B BTC options expiry

Bitcoin has lost the $50,000 level but derivatives data lays out a few good reasons why bulls might march on the resistance level ahead of Friday’s $2 billion BTC options expiry.

$2 billion worth of Bitcoin (BTC) options will expire on Friday, Aug. 27. Some analysts argue that a strong call (buy) option buying activity on Aug. 22 was likely the catalyst for the recent $50,000 price test.

Digital asset trading firm QCP Capital mentioned in its market update that an entity has been "consistently pushing (option) prices higher in the last few weeks." The activity, which took place during the morning trading session in Asia, aggressively bought bullish options in chunks of 100 BTC contracts each.

The report also mentions the exhaustion of regulatory concerns in the near term, as crypto-related decisions from the Senate Banking Committee and regulators are unlikely to bear fruits in 2021.

Bears might be analyzing different data

However, the most recent "The Week On Chain" report from blockchain analytics provider Glassnode included some concerning data from Bitcoin on-chain activity. Such analysis found that the amount of entity-adjusted transactions has not responded to the ongoing bullish action.

Moreover, Decentrader, a crypto market-intelligence provider, highlighted insufficient trading volume during this recent move to push BTC's price above $52,000.

Bitcoin options aggregate open interest for Aug. 27. Source: Bybt.com

Friday will be an important test of the $50,000 level, as 4,372 BTC option contracts await the $218 million decision.

The initial call-to-put analysis shows the vast dominance of the neutral-to-bullish call instruments, with 60% larger open interest. Nevertheless, bulls might have been too optimistic, as 68% of their bets have been placed at $50,000 or higher.

Related: Bitcoin rejects $51K after Michael Saylor reveals new BTC purchase — What’s next?

91% of the put options will probably be worthless at expiry

On the other hand, 91% of the protective put options have been placed at $46,000 or below. Those neutral-to-bearish instruments will become worthless if Bitcoin trades above that price on Friday. The options expiry happens at 8:00 am UTC, so some additional volatility is expected ahead of the event.

Below are the four most likely scenarios, considering the current price levels. The imbalance favoring either side represents the potential profit from the expiry considering calls (buy) options are more frequently used in bullish strategies, whereas protective puts are used in neutral-to-bearish trades.

  • Below $45,000: 4,040 calls vs. 2,500 puts. The net result is a $69 million advantage for the neutral-to-bullish instruments.
  • Above $46,000: 6,500 calls vs. 1,300 puts. The net result is $239 million favoring the neutral-to-bullish instruments.
  • Above $48,000: 7,400 calls vs. 420 puts. The net result is a $335 million advantage for neutral-to-bullish instruments.
  • Above $50,000: 12,000 calls vs. 35 puts. The net result is a $600 million advantage for neutral-to-bullish instruments.

The above data shows how many contracts will be available on Friday, depending on the expiry price. There's no way to measure the net result for every market participant as some investors could be trading more complex strategies, including market-neutral ones using both calls and protective puts.

Those two competing forces will show their strength as bears will try to minimize the damage. Either way, bulls have complete control of Friday's expiry, and there seem to be enough incentives for them to defend the $48,000 level and even try a more significant gain by pushing the price above $50,000.

Meanwhile, bears should concentrate on the September expiry, although keeping in mind that El Salvador is expected to introduce Bitcoin as legal tender next month. In addition, the country is building the infrastructure to support a state-issued Bitcoin wallet called Chivo.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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This bullish Bitcoin options strategy targets $50K without risk of liquidation

The Long Condor options strategy allows traders to place bullish bets without taking on liquidation risks.

Long-dated Bitcoin options and bulls still make waves with their ultra bullish bets, but even they must admit that the possibility of (BTC) trading above $60,000 in the next couple of months is dim. 

Many traders have added leveraged-long positions via futures contracts to chase after the elusive all-time high, but this seems like an unrealistic outcome.

According to Willy Woo, a popular on-chain analyst, exchange outflows and accumulation from BTC miners and whales suggest that Bitcoin price will reach the $50,000 to $65,000 range in the coming sessions.

Even Gary Gensler, the Chair of the United States Securities and Exchange Commission, believes that cryptocurrencies won’t go away and will likely play a big role in the future of finance. Therefore, being moderately bullish for the next couple of months will likely yield positive results.

For bullish traders who think Bitcoin price will break to the upside but are unwilling to face the liquidation risks imposed by futures contracts, the “long condor with call options” strategy might yield more optimal results.

Options are a safer bet for avoiding liquidations

Options markets provide more flexibility to develop custom strategies and there are two instruments available. The call option gives the buyer upside price protection, and the protective put option does the opposite. Traders can also sell the derivatives to create unlimited negative exposure, similar to a futures contract.

Bitcoin options strategy returns. Source: Deribit Position Builder

This long condor strategy has been set for the Sep. 21 expiry and uses a slightly bullish range. The same basic structure can also be applied for bearish expectations, but we’ll assume most traders are looking for upside.

Bitcoin was trading at $37,830 when the pricing took place, but a similar result can be achieved starting from any price level.

The first trade requires buying 1.20 BTC worth of $42,000 call options to create a positive exposure above this price level. Then, to limit gains above $46,000, the trader needs to sell 1.1 BTC contracts of the $46,000 call.

To complete the strategy, the trader needs to sell 1.3 BTC contracts of the $56,000 call, limiting the gains above this price level. Then a $60,000 upside protection call for 1.22 BTC is needed to limit the losses if Bitcoin unexpectedly skyrockets.

Related: Bitcoin price dips below $38K, with bullish traders eyeing a new higher low next

In this situation, the gain far outweighs the loss

The strategy might sound complicated to execute, but the margin required is only 0.0265 BTC, which is also the max loss. The potential net profit happens if Bitcoin trades between $42,950 (up 13.5%) and $59,450 (up 57%).

Traders should remember that it is also possible to close the position ahead of the Sep. 21 expiry if there’s enough liquidity. The max gain occurs between $46,000 and $56,000 at 0.0775BTC, almost three times higher than the potential loss.

With over 50 days until the expiry date, this strategy gives the holder peace of mind because there is no liquidation risk like futures trading.

Another positive is that most derivatives exchanges accept orders as low as 0.10 BTC contracts, meaning a trader could build the same strategy using a much smaller amount.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Bitcoin bulls control Friday’s $1.7B monthly options expiry

Bitcoin's surge above $40,000 boosted the bulls' advantage in this month's $1.7 billion options expiry.

On Friday, July 30, a total of 42,850 Bitcoin (BTC) option contracts ($1.7 billion) are set to expire. This might be the first time since the May 21 weekly expiry that bulls will be able to profit from the $40,000 call (buy) options. 

The most recent surge in price may have been prompted by the rumor that Amazon would accept crypto payments, but after the e-commerce giant denied these rumors, BTC has held relatively steady.

According to options markets, regardless of the reason behind the recent market strength, a few incentives are in place for bulls to sustain the $40,000 level.

Aggregate July 30 Bitcoin option open interest by strike. Source: Bybt.com

While the initial analysis favors the neutral-to-bullish call options by 21% according to the call-to-put ratio, a decent number of those bets were placed at $45,000 and higher strikes. These options are almost worthless with less than 14 hours until maturity.

Bulls are in complete control

Bears were overconfident for the monthly expiry and 87% of the neutral-to-bearish put options have been placed at $39,000 or lower. If bears are to suppress the price below this level on July 30, a total of $105 million put options will be available.

Meanwhile, the neutral-to-bullish call options below $39,000 amount to $320 million. The net result is a $215 million advantage favoring the neutral-to-bullish call options.

Sustaining the price above $40,000 on July 30 would increase the bulls' lead by $140 million. This difference seems enough to justify a price push above that level, at least until 8:00 am UTC when Deribit expiry takes place.

July future contracts also exert some influence

Bitcoin futures expiries occur simultaneously, but unlike options, longs and shorts are evenly matched at all times.

An aggregate of $650 million in BTC futures is set to expire this Friday, but this will largely depend on the CME's $455 million because traders might close their position before the expiry, which happens on Friday at 3:00 pm UTC.

At the moment, the options market data largely favors bulls, at least for the short-term.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Backwardation in Bitcoin futures contracts shows pro investors lack confidence

BTC traders are still searching for a bottom, but derivatives metrics show sentiment is negative and even the rally to $40,000 had little impact.

Bitcoin (BTC) might have tested the $40,000 support in mid-July, but according to various derivatives metrics, there has not been a significant change in investor optimism. 

This situation either means that price is not what they are looking to mark the end of the current bear market, or that most traders are still underwater at $40,000.

One of the best measures of optimism is the futures market premium, which measures the gap between longer-term contracts and the current spot market levels. In healthy markets, a 5% to 15% annualized premium is expected. However, during bearish markets this indicator fades or turns negative, a situation known as backwardation, and an alarming red flag.

Huobi 1-month Bitcoin futures basis. Source: Skew

According to the chart above, the 1-month futures contract has been unable to sustain an annualized premium above 5% since June 18. There have even been some periods of backwardation, including the most recent one on July 5.

There is, of course, the possibility that derivatives markets could decouple from regular spot markets. Maybe investors are unwilling to take the exchange risk, as futures contracts require margin deposits.

Could spot and derivatives markets diverge?

To understand whether the bearish signals seen in derivatives are explicitly tied to these instruments, one should analyze spot market volumes. Typically, bearish markets will present lower trading activity a couple of weeks after the price crash.

Bitcoin market cap (above) and aggregative trading volume, in USD billion. Source: TradingView

As predicted, the traded volume peaked in late May but more than halved a couple of weeks later. Although this cannot be deemed a bearish indicator by itself, it expresses a lack of interest in trading at the current levels.

This movement might happen when buyers are scared and, as a result, place scaling bids below market levels, or when sellers have been exhausted. Unfortunately, there's no way to know until a decent amount of volume trades outside of the $650 billion market capitalization area.

Options markets can assist in confirming bearish sentiment

However, there's another way to gauge professional traders' optimism. The 25% delta skew compares similar call (buy) and put (sell) options. When fear is prevalent, the metric will turn positive as the protective put options premium is higher than similar risk call options.

The opposite holds when market makers are bullish, causing the 25% delta skew indicator to shift to the negative area.

Deribit Bitcoin options 25% delta skew. Source: laevitas.ch

A 25% delta skew ranging from negative 10% to positive 10% is usually deemed neutral. However, the indicator has been above such a range since June 30, indicating fear from arbitrage desks and market markets.

The last time this indicator showed a bullish sentiment was on April 14, the exact day of the $64,900 all-time high.

Considering that none of the derivatives indicators showed signs of bullishness even as Bitcoin price held above $40,000 on June 15, there is reason to believe that investors are not comfortable opening long positions right now. It remains unknown what will trigger a sentiment change, but it will certainly take more than a single 10% rally.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Data shows Bitcoin bears dominate Friday’s $2.5B BTC options expiry

Bears have a potential $450 million lead if Bitcoin fails to hold $32,000 until June 25.

Bitcoin (BTC) price dropped roughly 22% over the past 7 days, retesting the $31,700 area for the second time in June. The most pressing news for the negative performance has been China supposedly cracking down bank accounts of over-the-counter desks, according to some analysts:

However, as reported by Cointelegraph, Bitcoin's hash rate dropping nearly 50% to an 8-month low could also have played a vital role in the price correction. Not even MicroStrategy's recent $489 million purchase was enough to sustain the $35,000 support.

The movement raised suspicions that the June 25 options and futures expiry could also be behind the move. After all, this month will potentially settle $2.5 billion worth of options and another $2 billion in futures contracts.

Currently, the CME futures represent nearly half of the futures open interest, although historically, most investors roll over their position during the last week of trading.

Market makers and arbitrage desks tend to carry a short futures position while simultaneously holding BTC, thus profiting from the premium to regular spot exchange markets. Meanwhile, large asset managers such as Tudor Investments carry long futures exposure.

However, there is no gain in rolling an option contract that is already worthless. With less than five days until expiry, a right to buy Bitcoin (call) at $44,000 is trading at $20.

Bitcoin options aggregate open interest for June 25. Source: Bybt

The initial picture favors bulls, as the neutral-to-bullish call (buy) options contracts are 36% more present for June 25 expiry.

Related: Ethereum’s $1.5B options expiry on June 25 will be a make-or-break moment

Notice how 87% of the right to buy (call) options have been placed above $34,000. Therefore, if Bitcoin stays below that level, only $200 million worth of open interest from those neutral-to-bullish contracts will partake in the June expiry.

Meanwhile, 46% of the protective put options have been opened above $34,000. This represents a $510 million open interest, giving those neutral-to-bearish contracts a significant advantage.

The $310 million difference favoring bears will be reduced by $190 million if Bitcoin trades above $36,000 on June 25. On the other hand, bears can add another $140 million open interest by pressuring the price below $32,000. The potential $450 million advantage is substantial and should not be ignored.

For the bulls, it might make sense to throw in the towel, lick their wounds, and maybe open new positions using a front spread with puts, allowing gains with no upfront cost besides margin.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Bulls aim to reclaim $40K ahead of Friday’s $520M BTC options expiry

Bulls will eliminate 99% of the bear’s protective puts if BTC trades above $40,000 on June 19.

Bitcoin (BTC) bulls have little reason to celebrate the 25% rally over the past nine days. After testing the $31,000 support on June 8, top traders' optimism faded, and even the recent $41,000 high was unable to boost their expectations.

Contrary to market sentiment, the United Kingdom's Financial Conduct Authority has indicated a significant increase in cryptocurrency ownership in the country. A consumer survey found that 2.3 million adults in the U.K. now hold crypto assets, which is up from 1.9 million last year.

Another theory that has been proven wrong is the supposition that whales have been selling, causing the Bitcoin price to remain below $47,000 for 31 days. Counter to this narrative, data from Santiment shows that addresses holding between 100 and 10,000 BTC increased their positions by $367 billion during that period.

Regardless of investors' long-term bullishness, there is $520 million worth of BTC options set to expire at 8:00 am UTC on June 18. While the initial screening shows the neutral-to-bullish call options with a 20% lead, a more granular view provides a different picture.

Bitcoin June 18 aggregate options expiry by strike. Source: Bybt

The neutral-to-bullish call (buy) option provides upside price protection to buyers, while the opposite occurs when holding the protective put (sell) options. By measuring each price level's risk exposure, traders can gain insight into how bullish or bearish traders are positioned.

The total number of contracts set to expire on June 18 is 13,400, or $520 million at Bitcoin's current $39,000 price. Bulls lead with 1,240 contracts, equivalent to $48 million, but it depends on what price Bitcoin will stand on Friday morning.

Bulls have a $60 million lead above $38,000

While the initial picture seems bullish, one must consider that the $44,000 call (buy) options are almost worthless, with less than sixteen hours left before expiry. A more balanced situation emerges when those bullish contracts are disregarded.

Less than 2,200 call options have been placed at $38,000 or below, an $84 million open interest. At $40,000, another 1,000 neutral-to-bullish options become active, raising the open interest to $128 million.

On the other hand, the protective put options at $38,000 and higher amount to 750 contracts are worth $28 million. This gives bulls a comfortable $60 million lead and an incentive to move the price above $40,000, increasing the difference to $120 million. In this case, 99% of the protective put options will become worthless.

Related: Traders look for Bitcoin price daily close at $41K to confirm bullish reversal

Bears need to wait for until last minute to salvage their position

Options contracts at Deribit, OKEx, and Bit.com happen exactly at 8:00 am, so there is no benefit in trying to manipulate the price ahead of that event. However, bears may have thrown the towel, concentrating efforts on the monthly expiry on June 25. Bulls, on the other hand, have strong incentives to boost their profits on June 17.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Here’s how traders use call options to increase their Bitcoin holdings

Learn how pro traders use covered call strategies as a low-risk method to increase their Bitcoin holdings.

Crypto traders are drawn to the market by its bombastic growth and lucrative opportunities to make a profit. However, not every investor is seeking volatility or using degenerate leverage levels to gamble at derivatives exchanges. 

In fact, stablecoins usually comprise half of the total value locked (TVL) on most decentralized finance (DeFi) applications that focus on yields.

There's a reason why DeFi boomed despite Ethereum network median fees surpassing $10 in May. Institutional investors are desperately seeking fixed income returns as traditional finance seldomly offers yields above 5%. However, it is possible to earn up to 4% per month using Bitcoin (BTC) derivatives on low-risk trades.

Non-investment grade bonds yield. Source: U.S. Federal Reserve

Notice how even non-investment grade bonds, far riskier than Treasury Bills, yield below 5%. Meanwhile, the official inflation rate in the United States for the past 12 months has stood at 4.2%.

Paul Cappelli, a portfolio manager at Galaxy Fund Management, recently told Cointelegraph that Bitcoin's "inelastic supply curve and deflationary issuance schedule" make it a "compelling hedge against inflation and poor monetary policies that could lead to cash positions becoming devalued over time."

Centralized services such as Crypto.com, BlockFi, and Nexo will typically yield 5% to 10% per year for stablecoin deposits. To increase the payout, one needs to seek higher risks, which does not necessarily mean a less known exchange or intermediary.

Stablecoin yields on centralized services. Source: loanscan.io

However, one can achieve a 2% weekly yield using Bitcoin derivatives. For those instruments, liquidity currently sits at centralized exchanges. Therefore the trader needs to factor in counterparty risk when analyzing such trades.

Selling a covered call can become a semi-fixed income trade

The buyer of a call option can acquire Bitcoin for a fixed price on a set future date. For this privilege, one pays upfront for the call option seller. While the buyer typically uses this instrument as insurance, sellers are usually aiming for semi-fixed income trades.

Each contract has a set expiry date and strike price, so potential gains and losses can be calculated beforehand. This covered call strategy consists of holding Bitcoin and selling call options, preferably 15% to 20% above the current market price.

It would be unfair to call it a fixed income trade as this strategy aims to increase the trader's Bitcoin balance, but it doesn't protect from negative price swings for those measuring returns in USD terms.

For a holder, this strategy does not add risk as the Bitcoin position will remain unchanged even if the price drops.

Bitcoin June 4 call options markets. Source: Deribit

Considering that Bitcoin was trading $37,000 when the above data was gathered, a trader could sell the $44,000 call option for June 4, maturing in six days. Depositing a 0.10 BTC margin should be enough to sell 0.30 BTC call option contracts, thereby receiving 0.00243 BTC in advance.

Two outcomes: higher Bitcoin quantity or larger USD position

There are essentially two outcomes, depending on whether Bitcoin trades above or below $44,000 at 8:00 am UTC on June 4. The $44,000 call option will become worthless for any level below this figure, so the option seller keeps the 0.00243 BTC advance payment in addition to the 0.10 BTC margin deposit.

However, if the expiry price is higher than $44,000, then the trader's margin will be used to cover the price difference. At $46,000, the net loss is 0.011 Bitcoin, therefore reducing the margin to 0.089 ($4.094). Meanwhile, at the time of the deposit, the 0.10 Bitcoin margin was worth $3,700.

Indeed the covered call option seller would have made more money by holding the 0.10 Bitcoin from the beginning, as the price increased from $37,000 to $46,000. Nevertheless, by receiving the 0.00243 BTC advanced payment, one will increase the Bitcoin holdings even if the price moves below $37,000.

That 2.4% profit in Bitcoin terms will happen for any expiry below $44,000, which is 18.9% higher than the $37,000 when Deribit option prices were analyzed.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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$2.2 Billion Notional in BTC Options Set to Expire on Friday, Bitcoin Contango Has Returned

.2 Billion Notional in BTC Options Set to Expire on Friday, Bitcoin Contango Has ReturnedAccording to data from Skew Analytics, more than 55,000 bitcoin options contracts worth $2.2 billion will expire on Friday. Statistics further show, as far as options are concerned, Deribit captures the lion’s share of contracts with 48,469 bitcoin options contracts ($1.95 billion notional) set to expire. 55K in Bitcoin Option Set to Expire, Deribit Carries […]

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When all-time high? Bitcoin traders lose confidence as BTC price slumps

Bitcoin adoption continues to increase but derivatives data shows retail and professional traders are reluctant to build new bullish positions.

Bitcoin's (BTC) recent price action has disappointed most investors, especially when one considers that the total altcoin market capitalization rallied 24% in nine days to reach a $1.35 trillion all-time high on May 9. 

Bitcoin's 62% accumulated gain in 2021 has BTC traders feeling somewhat frustrated with altcoins and meme coins pumping to new daily highs.

Bitcoin price at Coinbase, USD. Source: TradingView

On May 10, Fidelity, a $3.8 trillion global asset manager, filed for a Bitcoin exchange-traded fund (ETF) request with the United States Securities and Exchange Commission. Fidelity's Wise Origin Bitcoin (BTC) partnered with the Chicago Board Options Exchange (CBOE), and the SEC's first response window will close in 44 days.

On May 11, Palantir (PLTR), a $30 billion data analytics company founded by billionaire Peter Thiel, announced that it had started to accept Bitcoin payments. The firm is likely to follow in Tesla (TSLA) and MicroStrategy's (MSTR) footsteps by adding BTC to its balance sheet, and the firm could have more than $2 billion in cash on hand for investments.

In other news, the proposed Taproot upgrade aims to make complex transactions cheaper, faster and easier to deploy. More importantly, this upgrade would bring some privacy to multisig and time-lock functions.

Taproot activation will only be given the green light if 90% of all mined blocks include an activation signal ahead of August 11.

However, despite all this positive news, BTC's price action has not taken its usual bullish turn. The most significant immediate hurdle appears to be the lack of a regulatory framework. Joanna Wasick, a partner at law firm BakerHostetler, told Cointelegraph:

"How many people using crypto for payments know exactly what the tax implications are of their payment transactions?"

Retail traders are not demanding excessive leverage for longs

The first evidence that traders are in utter disbelief comes from the extremely modest perpetual funding rate. Futures contracts have an embedded rate that is usually charged every eight hours to ensure no exchange risk imbalances. Even though the buyers' and sellers' open interest is matched at all times, their leverage can vary.

When longs are demanding more leverage, they will be the ones paying the fee. Therefore, the current situation can be interpreted as bullish. The opposite holds when shorts are using more leverage, thus causing a negative funding rate.

Bitcoin perpetual futures 8-hour funding rate. Source: Bybt

Take notice of how the current 0.02% rate, equivalent to 1.8% per month, is much smaller than the recent peaks. While professional traders tend to prefer the fixed-month calendar futures, retail dominates perpetual ones, avoiding the expiries' hassle. Therefore, this data shows that there is a lack of appetite since April 17.

The options skew indicator is on the verge of turning bullish

To better understand how pro traders are positioning themselves, investors should look at the options markets. Call options allow the buyer to acquire Bitcoin at a fixed price on contract expiry. On the other hand, put options provide insurance for buyers and protect against price drops.

Whenever market makers and pro traders are leaning bullish, they will demand a higher premium on call (buy) options, which will cause a negative 25% delta skew indicator.

Bitcoin 30-day options 25% delta skew. Source: laevitas.ch

A skew indicator between -10 and +10 is deemed neutral, which has been the case since April 15. This data is evidence of a balanced risk assessment from whales and market makers between downside and upside risk.

In line with today's price drop, there is little evidence that option traders are bullish. This data also aligns with the BTC perpetual futures markets.

Bitcoin has managed to close above $50,000 in 65 out of the past 66 days, likely creating a 'comfort zone' for bulls. Therefore, as long as this support stands, there is still hope that Bitcoin will notch a new record-high.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Executives flood blockchain gaming firms ahead of 2025’s AAA launches