Key Bitcoin price metric shows pro traders are nervous about $19K BTC


This week Bitcoin (BTC) value rallied to a brand new 3 yr excessive at $18,965, main traders to imagine a brand new all-time excessive above $20,000 is on the playing cards. 

Whereas these are thrilling instances, knowledge does present that some skilled traders really feel antsy concerning the value at these ranges and the absence of retail FOMO has some calling for a pointy pullback.

Information reveals Bitcoin hasn’t seen a drop bigger than 5% since Sept. 4 and over the previous 77 days the digital asset has gained 84%.The final time comparable value motion was noticed was on Nov. 25, 2019.

Bitcoin value (USD) at Bitstamp. Supply: TradingView

Again then, BTC made a 47% transfer from $6,900 to $10,150 by mid-February 2020, a 86 day sequence. However, one shouldn’t leap to the conclusion {that a} substantial correction essentially follows each motion with no 5% every day drop.

Proof of such disparate expectations could be extracted from the futures contracts foundation. Sometimes, the indicator ought to show a 3% to 10% annualized premium.

BTC 3-month futures contract premium, January 2020. Supply: Skew

Take discover how merchants have been prepared to pay a further 20% annualized to hold leveraged positions again in February. That is somewhat uncommon and a sign of utmost optimism.

This time round, the idea indicator has been gravitating close to 10%. Due to this fact, it’s secure to deduce that the percentages of cascading promote order liquidations is far decrease this time.

BTC 3-month futures contract premium. Supply: Skew

Lack of optimism is an indication of lowered conviction

Merchants have been bowled over by this uncommon development, and knowledge confirms that there’s a full lack of conviction. Although the BTC futures contracts premium currently stands at a bullish zone, that validify shopping for it indiscriminately.

To successfully gauge whether or not professionals have been carrying lengthy positions all through this rally, traders ought to monitor the highest merchants long-to-short ratio at main crypto exchanges.

Huobi BTC high merchants long-to-short ratio. Supply: Huobi

At Huobi we are able to see that the highest merchants entered a internet brief place as Bitcoin surpassed $16,000 on Nov.16. On Nov.19, just a few bearish bets appeared as BTC failed to interrupt the $18,000 resistance. As soon as once more, they have been fast to shut their losses and are at the moment flat. Due to this fact, one can assume that skilled merchants have been making an attempt to guess a neighborhood high with out a lot conviction.

Curiously, knowledge from Binance reveals high merchants making use of a unique technique. Regardless of this, it nonetheless displays an absence of conviction, as one can infer beneath.

Binance BTC high merchants long-to-short ratio. Supply: Binance

Binance high merchants held a ten% internet lengthy whereas Bitcoin rallied above $16,000 however they then scrambled to purchase after it shot above $17,500.

Whereas nonetheless sustaining a bullish place, they considerably lowered it as BTC struggled to interrupt $18,000 on Nov.18.

It’s price noting that exchanges collect high merchants’ knowledge otherwise, as there are a number of methods to measure purchasers internet publicity. Due to this fact, any comparability between completely different suppliers ought to be made on percentual modifications as an alternative of absolute numbers.

In the end, the info sign that there’s some indecision or a minimum of an absence of robust conviction amongst high merchants.

When the market is sending blended indicators there’s nothing improper with sitting tight and never being ready. At the least, that is what savvy merchants appear to be doing.

The views and opinions expressed listed here are solely these of the author and don’t essentially mirror the views of Cointelegraph. Each funding and buying and selling transfer entails threat. It is best to conduct your personal analysis when making a call.