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Bitcoin price metrics point to more upside despite $92K acting as resistance 

Data hints that new all-time highs are on the way, even if Bitcoin struggles to gain above $92,000. 

Bitcoin (BTC) has been trading within a narrow 7% range since Nov. 12, signaling a period of consolidation around $91,000. Still, derivatives indicate that professional traders remain confident in the bull market. Additionally, multiple attempts to break above the $92,000 level suggest strong buying demand beyond the multiple MicroStrategy BTC acquisitions.

Bitcoin 30-day options 25% skew (put-call) at Deribit. Source: Laevitas.ch

The BTC options delta skew has dropped to its lowest level in four months, indicating the market is pricing a discount for put (sell) options. Levels below -6% suggest bullish sentiment and reflect confidence in the $87,000 support level, particularly from whales and arbitrage desks.

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MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

3 reasons why Bitcoin price bottom could have been $67.3K 

Data suggests traders are ignoring the current Bitcoin price correction and betting for new highs after the US elections wrap up.

Bitcoin (BTC) fell 6.7% between Oct. 31 and Nov. 4, breaking below the $67,500 mark for the first time in eight days. This decline led to the liquidation of over $190 million in leveraged long positions and coincided with uncertainty surrounding the Nov. 5 US presidential elections.

Despite this short-term bearish momentum, three Bitcoin derivatives metrics show that the market is not panicking. These positive indicators include the long-to-short ratio of top traders on exchanges, aggregate BTC futures open interest, and stablecoin demand in China.

Exchanges top traders long-to-short ratio. Source: Coinglass

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MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

Ethereum futures open interest hits 19-month high, yet ETH price weakness intensifies

Ethereum derivatives metrics show increased activity, indicating higher interest but not necessarily a bullish trend.

Ether (ETH) experienced a 10% correction between July 31 and Aug. 2, retesting the $3,000 support for the first time since July 8. This movement significantly outpaced the broader cryptocurrency market, which declined by 6.8% during the same period. Despite this, Ether futures open interest rose to its highest level in seven months, leading traders to speculate whether a rally to $3,600 is the next probable move.

The increased activity in ETH futures contracts typically indicates institutional investors' interest, as open interest measures the demand for leverage. However, buyers (longs) and sellers (shorts) are always matched, so an increase in open interest does not inherently indicate a positive outlook.

Part of Ether’s decline can be attributed to the lack of net inflows into recently launched Ether exchange-traded funds (ETFs) in the United States. Although there were some inflows, particularly into BlackRock’s iShares Ethereum Trust and the Fidelity Ethereum Fund, these were offset by outflows from the Grayscale Ethereum Trust, which has existed since before the ETF conversion.

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MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

‘No clear catalyst’ for bloodbath as top altcoins fall double digits

Crypto market analysts suggest the altcoin stumble may be tied to a recent spate of spot Bitcoin ETF outflows.

Crypto markets tumbled into a sea of red on Monday as some altcoins bled more than 10%, with an industry analyst telling Cointelegraph that there’s “no clear catalyst” to explain why.

The crypto market cap has fallen to $2.46 trillion, down 3.5% over the last 24 hours. Shiba Inu (SHIB) and Avalanche (AVAX) have been the hardest hit altcoins among the top 20 by market cap on June 17, falling 12.7% and 10.6% during the day, CoinGecko data shows.

Uniswap (UNI) and Dogecoin (DOGE) also saw a double-digit drop, while Solana’s (SOL) dipped 9.4%. Ripple’s XRP (XRP) was the only non-stablecoin not in the red, though it only saw a minor 0.1% increase.

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MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

Bitcoin price continues to drop, but how are pro BTC traders positioned?

Data shows top traders futures’ Bitcoin long-to-short at the lowest level in 30 days, but what does this mean for BTC's short-term price action.

Bitcoin (BTC) has experienced a remarkable 15.7% price surge in the first six days of December. This surge has been heavily influenced by the anticipation of an imminent approval of a spot exchange-traded fund (ETF) in the United States. Senior Bloomberg ETF analysts have expressed a 90% probability for approval by the U.S. Securities and Exchange Commission, which is expected before Jan. 10.

However, Bitcoin’s recent price surge may not be as straightforward as it seems. Analysts have failed to consider the multiple rejections at $37,500 and $38,500 during the second half of November. These rejections have left professional traders, including market makers, questioning the market’s strength, particularly from the perspective of derivatives metrics.

Bitcoin’s 7.6% rally to $37,965 on Nov. 15 resulted in disappointment as the movement fully retracted the following day. Similarly, between Nov. 20 and Nov. 21, Bitcoin's price declined by 5.3% after the $37,500 resistance proved more formidable than anticipated.

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MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

Bitcoin price races toward $27K, but a swift recovery is not confirmed by market data

BTC’s price recovered quickly from this week’s swing low, but derivatives data hints that a challenging road lies ahead.

Bitcoin might have displayed strength by quickly recovering from the $25,500 support level on June 6, but that doesn’t mean that breaking above $27,500 will be an easy task. 

Investors still expect stricter regulatory scrutiny after FTX’s bankruptcy in November 2022, including the recent suits against Coinbase and Binance.

A total of eight cryptocurrency-related enforcement actions have been undertaken by the United States Securities and Exchange Commission (SEC) over the past six months. Some analysts suggested the SEC is attempting to redeem itself for failing to police FTX by taking action against the two leading exchanges.

Additionally, looking at a wider angle, investors fear that a global recession is imminent, which limits the upside of risk-on assets such as stocks, cryptocurrencies and emerging markets.

The eurozone entered a recession in the first quarter of this year, according to revised estimates from the region’s statistics office, Eurostat, released June 8. Poor economic performance might limit the European Central Bank’s ability to further increase interest rates to tackle inflation.

Billionaire Ray Dalio, founder of Bridgewater Associates, said the U.S. is seeing stubbornly high inflation along with elevated real interest rates. Dalio warned of an excess debt offer amid a shortage of buyers, which is especially concerning since the U.S. government is desperate to raise cash after the debt ceiling was hit.

Recent macroeconomic data has been mostly negative, especially after China announced a 4.5% decline in imports year over year on June 6. Furthermore, Japan posted a 0.3% quarter-over-quarter contraction in gross domestic product on June 7.

Let’s look at Bitcoin (BTC) derivatives metrics to better understand how professional traders are positioned amid the weaker global environment.

Bitcoin margin and futures favor bullish momentum

Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.

OKX, for instance, provides a margin-lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only bet on the decline of a cryptocurrency’s price.

OKX stablecoin/BTC margin-lending ratio. Source: OKX

The above chart shows that OKX traders’ margin-lending ratio spiked on June 5 after Bitcoin crashed by 7% to $25,500. Those traders were likely caught by surprise, as the indicator reached an impressive 62 favoring longs, which is highly unusual and unsustainable.

The OKX margin-lending ratio adjusted to 34 on June 6, as leveraged longs were forced to reduce their exposure and additional margin was likely deposited.

Investors should also analyze the Bitcoin futures long-to-short metric, as it excludes externalities that might have solely impacted the margin markets.

Exchanges’ top traders Bitcoin long-to-short ratio. Source: CoinGlass

There are occasional methodological discrepancies between exchanges, so readers should monitor changes instead of absolute figures.

Both OKX’s and Binance’s top traders reduced their long-to-short ratios between June 7 and June 8, indicating a lack of confidence. More precisely, the ratio for OKX top traders declined to 0.78 on June 8 after peaking at 1.08 on June 7. Meanwhile, at crypto exchange Binance, the long-to-short ratio declined to 1.29 on June 8 from 1.35 on the previous day.

Related: Bitcoin rebound falters amid SEC crackdown on exchanges, raising chance of a BTC price capitulation

Overall, Bitcoin bulls seem to be in a bad place, both from the worsening regulatory crypto environment and the unfolding global economic crisis.

Bitcoin derivatives markets indicate a low probability of the BTC price breaking above $27,500 in the short to medium term. In other words, Bitcoin’s market structure is bearish, so a $25,500 support retest is the most probable outcome.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

Bitcoin, gold and the debt ceiling — Does something have to give?

Traders are still tiptoeing around markets, as multiple risk events remain at the forefront, but BTC margin and futures markets are starting to favor a bullish breakout.

Bitcoin has been trying to break above the $27,500 resistance for the past week but to no avail. One of the reasons limiting Bitcoin’s (BTC) upside is the risk of an eventual United States default as the government struggles to get the debt limit increase approved in Congress. 

Still, some analysts and investors argue that the U.S. debt ceiling standoff is merely a “show” because, ultimately, additional money will hit the markets.

Notice how MacroJack correlates Bitcoin’s digital scarcity to the next logical step: additional inflationary pressure. The stimulus measures, meaning increasing the government debt limit, might initially sound positive because they avoid default and favor more economic activity. However, the unintended consequences are future budget constraints as the debt interest payment increases.

Bitcoin price increases while gold breaks a 45-day low

Bitcoin’s gains above $27,000 happened while gold traded down 2.5% from May 15 to May 18, reaching its lowest level in 45 days at $1,970. Meanwhile, the U.S. Dollar Index, which measures the currency against a basket of foreign exchanges, reached its highest level in two months on May 18, meaning the U.S. currency gained strength relative to its global peers.

This data should not be interpreted as a vote of confidence in the government’s ability to avoid a shutdown, as the global economy would be negatively impacted in the event of a U.S. debt default. For instance, eurozone members hold $1.54 trillion in U.S. Treasurys, followed by Japan’s $1.1 trillion, China’s $860 billion and the United Kingdom’s $668 billion.

Strong macroeconomic data explains the resilience of equities markets

While the global economy may deteriorate in the coming months, recent macroeconomic data has been mostly positive, causing the S&P 500 index to hold modest gains in May, standing merely 13% below its all-time high.

For instance, China’s retail sales grew 18.4% year-over-year in April, while the eurozone’s first-quarter gross domestic product increased by 1.3% versus the previous year. In the U.S., retail sales rose 0.5% year-over-year in April, slightly lower than expected but far from being a recession indicator.

Let’s look at Bitcoin derivatives metrics to better understand how professional traders are positioned in the current market environment.

Bitcoin margin and futures favor bullish momentum

Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.

OKX, for instance, provides a margin-lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only bet on the decline of a cryptocurrency’s price.

OKX stablecoin/BTC margin-lending ratio. Source: OKX

The above chart shows that OKX traders’ margin-lending ratio increased between May 12 and May 17. Such data coincides with Bitcoin’s price recovery in the period, although it is not troublesome, as the current 31 margin-lending ratio nears its 30-day average.

Investors should also analyze the BTC futures long-to-short metric, as it excludes externalities that might have solely impacted the margin markets. There are occasional methodological discrepancies between exchanges, so readers should monitor changes instead of absolute figures.

Exchanges’ top traders Bitcoin long-to-short ratio. Source: CoinGlass

Despite Bitcoin trading down 8% since May 5, pro traders have recently increased their bullish positions to their highest level in two weeks, according to the long-to-short indicator.

For instance, the ratio for OKX increased from 1.08 on May 12 to 1.25 on May 18. Meanwhile, at crypto exchange Binance, the long-to-short ratio increased from 1.14 on May 12 to the current 1.25.

Related: Bitcoin price capitulation below $26K possible as Friday’s BTC options expiry looms

Bitcoin bulls are in a better position, as there has been weak demand from short-sellers and no sign of excessive leverage from buyers. In other words, Bitcoin’s market structure is bullish, so odds favor a rally toward $28,000 if the U.S. debt ceiling stand-off continues.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

Will $28K Bitcoin price hold? Two indicators remain solid despite 5% pullback

BTC margin markets and futures’ long-to-short indicator show professional traders unwilling to bet on Bitcoin's price dropping.

Bitcoin (BTC) saw considerable volatility between April 25 and May 1, ranging between $27,200 and $30,000. From a trading perspective, the 10.5% move sounds alarming, resulting in $340 million in leveraged BTC futures contract liquidations.

However, from a broader angle, Bitcoin price is up 72% year-to-date in 2023, while the S&P 500 stock market index accumulated 9% gains.

BTC price climbs on weaker US dollar, banking crisis

Bitcoin’s bull run happened while the dollar strength index (DYX), which measures the U.S. currency against a basket of foreign exchanges, was nearing its lowest level in 12 months.

The indicator stands at 102, down from 105.3 eight weeks prior, as investors priced in higher odds of further interventions from the U.S. Treasury to contain the banking crisis.

On May 1, the California Department of Financial Protection and Innovation closed down First Republic Bank (FRB) and transferred control to the Federal Deposit Insurance Corporation (FDIC). The FDIC then entered into a purchase and assumption agreement with JPMorgan to protect depositors. FRB joined Silicon Valley Bank and Signature Bank to become the latest U.S. bank to collapse in 2023.

Now, the upcoming Federal Reserve decision on interest rate on May 3 is causing Bitcoin investors to question the sustainability of the $28,000 support level. By pushing the rate return closer to 5%, the central bank removes incentives for risk markets investments, hence, essentially negative for the price of Bitcoin.

Let's look at derivatives metrics to better understand how professional traders are positioned in the current market environment.

Bitcoin margin markets show modest optimism

Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.

OKX, for instance, provides a margin lending indicator based on the stablecoin/BTC ratio. Traders can increase their exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only bet on the decline of a cryptocurrency's price.

OKX stablecoin/BTC margin lending ratio. Source: OKX

The above chart shows that OKX traders' margin lending ratio increased between April 17 and April 30. That is somewhat concerning, as it shows that leverage has been used to support the Bitcoin price gains.

Moreover, the 43% ratio favoring BTC longs on April 27 was the highest level in 40 days, indicating overexcitement as Bitcoin flirted with $30,000, which adjusted to 32% after the latest correction to $28,400.

To exclude externalities that might have solely impacted the margin markets, one should analyze the long-to-short metric. In addition, it gathers data from exchange clients’ positions on the spot, perpetual, and quarterly futures contracts, thus offering better information on how pro traders are positioned.

Related: What the Gensler hearing means for US crypto regulation and policy

BTC derivatives markets show no signs of bearishness

There are occasional methodological discrepancies between different exchanges, so readers should monitor changes instead of absolute figures.

Exchanges' top traders Bitcoin long-to-short ratio. Source: Coinglass

Even though Bitcoin failed to break the $30,000 resistance, professional traders have increased their leveraged long positions using futures, according to the long-to-short indicator.

At crypto exchange OKX, the long-to-short ratio sharply increased, from 0.66 on April 27 to the current 0.93 on May 1. Moreover, at Binance the long-to-short ratio also increased, favoring longs, moving from 1.12 on April 25 to a 1.26 peak on April 30.

Therefore, despite the 5% price decline from a high of $29,970 on April 30, the bears using futures contracts were not confident enough to add leveraged shorts. Simply put, even if Bitcoin retests $28,000, bulls should not yet throw in the towel as both margin and futures market indicators remain healthy.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

How Bitcoin’s strong correlation to stocks could trigger a drop to $8,000

The absence of a CME Bitcoin futures premium, unrelenting record-high inflation and investor concerns over the economy are all factors weighing on BTC price.

The Bitcoin (BTC) price chart from the past couple of months reflects nothing more than a bearish outlook and it’s no secret that the cryptocurrency has consistently made lower lows since breaching $48,000 in late March.

Bitcoin price in USD. Source: TradingView

Curiously, the difference in support levels has been getting wider as the correction continues to drain investor confidence and risk appetite. For example, the latest $19,000 baseline is almost $10,000 away from the previous support. So if the same movement is bound to happen, the next logical price level would be $8,000.

Traders are afraid of regulation and contagion

On July 11, the Financial Stability Board (FSB), a global financial regulator including all G20 countries, announced that a framework of recommendations for the crypto sector is expected in October. The FSB added that international regulators need to supervise crypto markets in line with the principle of “same activity, same risk, same regulation.”

In a written speech on July 12, Jon Cunliffe, deputy governor for financial stability at the Bank of England, said that crypto is somehow over and it should not be a concern anymore. Cunliffe added: “innovation has to happen within a framework in which risks are managed.”

To date, investors still haven’t figured out the total losses from deposits on crypto lenders Celsius and Voyager Digital, and both firms continue to seek either a recovery plan or bankruptcy. According to Voyager, the firm still holds $650 million worth of “claims against Three Arrows Capital,” so the exact numbers of customer assets remain unknown.

The negative newsflow is reflected in the CME’s Bitcoin futures contracts premium. This data measures the difference between longer-term futures contracts and the current spot prices in regular markets.

Whenever this indicator fades or turns negative, this is an alarming red flag. This situation is also known as backwardation and indicates that bearish sentiment is present.

BTC CME 1-month forward contract premium vs. Coinbase/USD. Source: TradingView

These fixed-month contracts usually trade at a slight premium, indicating that sellers are requesting more money to withhold settlement for longer. As a result, futures should trade at a 0.25%–0.75% premium in healthy markets, a situation known as contango.

Notice how the indicator has stood below the “neutral” range since early April, since Bitcoin failed to sustain levels above $45,000. The data shows that institutional traders are unwilling to open leverage long positions, although it is not yet a bearish structure.

Macroeconomic fears are preventing investors from trading crypto

Exchange-provided data highlights traders’ long-to-short net positioning. By analyzing every client’s position on the spot, perpetual and futures contracts, one can better understand whether professional traders are leaning bullish or bearish.

There are occasional discrepancies in the methodologies between different exchanges, so viewers should monitor changes instead of absolute figures.

Exchanges top traders Bitcoin long-to-short ratio. Source: Coinglass

Despite Bitcoin’s 11% correction from July 9 to July 12, top traders have increased their leverage longs. The long-to-short ratio at Binance remained relatively flat at 1.13, while the top traders at Huobi started at 0.95 and finished the period at 0.93. However, this impact was more than compensated by OKX traders increasing their bullish bets from 1.09 to 1.32.

Related: The search term ‘Bitcoin Crash’ is trending — Here’s why

The lack of a premium in the CME futures contract is not concerning because Bitcoin is struggling with the $20,000 resistance. Furthermore, top traders on derivatives exchanges have increased their longs despite the 11% price drop in three days.

Regulatory pressure is unlikely to recede in the short term and at the same time, there’s not much that the Federal Reserve can do to suppress inflation without triggering some form of an economic crisis. For this reason, pro traders are not rushing to buy the dip because Bitcoin’s correlation to traditional assets remains 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.

MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin

Ethereum derivatives data shows pro traders are bearish, but for how long?

The ETH futures premium turned bearish and the network's TVL dropped 22% from its peak, but how is this impacting pro traders’ sentiment?

Ether (ETH) lost the critical $3,000 psychological support level on April 11 after a 16% weekly negative performance. Bulls were definitively caught by surprise as $104 million in leveraged long futures got liquidated on April 11. Ether's downturn also followed a decline in the total value locked (TVL) in Ethereum smart contracts. 

Ethereum network TVL in ETH. Source: Defi Llama

The metric peaked at 40.6 million Ether on Jan. 27, and has since dropped by 22%. This indicator could partially explain why Ether could not withstand the adversity brought by Bitcoin's (BTC) 13% weekly negative move.

However, the leading altcoin has catalysts of its own because Ethereum developers implemented the network's first-ever "shadow fork" on April 11. The testnet update created an area for developers to stress-test their assumptions around the network's complex shift to proof-of-stake.

More importantly, one needs to analyze how professional traders are positioning themselves and there's no better gauge than derivatives markets.

The futures premium is back to bearish levels

To understand whether the current bearish trend reflects top traders' sentiment, one should analyze Ether's futures contracts premium, also known as a "basis." Unlike a perpetual contract, these fixed-calendar futures do not have a funding rate, so their price will differ vastly from regular spot exchanges.

A trader can gauge the market sentiment by measuring the expense gap between futures and the regular spot market. A neutral market should present a 5% to 12% annualized premium (basis) as sellers request more money to withhold settlement longer.

Ether 3-month futures premium. Source: laevitas.ch

The above chart shows that Ether's futures premium stood above the 5% neutral threshold between March 25 and April 6, but later weakened to 3%. This level is typically associated with fear or pessimism because futures market traders are reluctant to open leveraged long (buy) positions.

Long-to-short data confirms worsening conditions

The top traders' long-to-short net ratio excludes externalities that might have impacted the longer-term futures instruments. By analyzing these whale positions on the spot, perpetual and futures contracts, one can better understand whether professionals effectively become bearish.

Exchanges' top traders Ether long-to-short ratio. Source: Coinglass

Firstly, one should note the methodological discrepancies between different exchanges, so the absolute figures have lesser importance. Yet, since April 5, there has been a considerable decline in the long-to-short ratio of every major derivatives exchange.

Data signals that whales have been increasing their bearish bets over the past week. For instance, the Binance whales held a 1.05 long-to-short ratio on April 5, but gradually reduced it to 0.88. Furthermore, the OKX top traders moved from a 2.11 favoring longs to the current 1.35.

Related: Kava turns bullish as Ethereum Co-Chain launch initiates push toward EVM compatibility

Are investors and users abandoning the network?

From the perspective of the metrics discussed above, there might not be an indicator pointing to extreme bearishness but the futures basis rate and the top traders' long-to-short ratio worsened over the past week.

Furthermore, the TVL in Ethereum smart contracts signals a decline in use. The constant delays in the proof-of-stake migration could be pulling investors' attention away and driving decentralized finance (DeFi), gaming, and nonfungible (NFT) projects to competing networks. In turn, traders have been focusing their attention on more promising altcoins and consequently diminishing the demand for Ether.

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.

MicroStrategy completes $3 billion convertible notes offering to buy more Bitcoin