The recent Bitcoin (BTC) price movement has disappointed most investors. especially when you consider that the total market cap of altcoins has increased 24% in nine days to hit an all-time high of $ 1.35 trillion May 9th.
Bitcoin’s cumulative gain of 62% in 2021 leaves BTC traders a little frustrated as altcoins and meme currencies soar to new daily highs.
10th of May, Fidelity, a $ 3.8 trillion global asset manager, filed an application with the Securities and Exchange Commission to set up an exchange-traded bitcoin fund (ETF). Fidelity’s Wise Origin Bitcoin (BTC) has partnered with the Chicago Board Options Exchange (CBOE). The first window of receiving a response from the SEC will close in 44 days.
May 11th Palantir (PLTR), a $ 30 billion data analytics company founded by billionaire Peter Thiel, announced that it is accepting bitcoin payments. The company will likely follow the steps from Tesla (TSLA) Y. MicroStrategy (MSTR) Adding BTC to its balance sheet could give the company more than $ 2 billion to invest.
In other news, The proposed taproot upgrade aims to make complex transactions cheaper, faster and easier. Most importantly, this update adds some level of privacy to the multiple signature and temporary lock features.
Traproot activation will only be approved if 90% of all mined blocks contain an activation signal before August 11th.
Despite all of this positive news, BTC price action has not taken its usual bullish turn. The main immediate obstacle seems to be the lack of a clear legal framework. Joanna Wasick, A partner at law firm BakerHostenler told Cointelegraph:
“How many people who use cryptocurrencies for payments know exactly the tax implications of their transactions?”
Retailers do not use excessive leverage on long positions
The first evidence that traders are completely reluctant is the extremely modest futures funding rate. Futures contracts have a built-in interest rate that is typically calculated every eight hours to ensure there are no currency risk imbalances. Although the open interest of buyers and sellers is the same at all times, the leverage used may vary.
If the long (bought) They need more leverage, they are the ones paying the commission. Therefore, the current situation can be interpreted as bullish. The opposite happens when Short (seller) You use more leverage, which results in a negative funding rate.
Note that the current rate of 0.02%, which is 1.8% per month, is much lower than the recent spikes. While professional traders typically prefer fixed monthly futures contracts, retailers dominate the perpetuals to avoid the hassle of expiration times. Hence, these data show that there has been anorexia since April 17th.
Options The Delta Tilt Indicator is going to be bullish soon
To better understand how professional traders position themselves, investors should analyze options markets. Call options allow the buyer to buy Bitcoin at a fixed price after the contract expires. Put options, on the other hand, offer buyers insurance and protection against price drops.
Whenever market makers and professional traders tend higher, they charge a higher premium for call options, which leads to it a 25% dip indicator for delta options negative.
An indicator between -10 and +10 is considered neutral, as it has been since April 15. These data demonstrate a balanced risk assessment by whales and market makers between upside and downside risk.
Consistent with today’s price collapse, there is little evidence that options traders are optimistic. This data is also consistent with the BTC perpetual futures markets.
Bitcoin has managed to close above $ 50,000 in 65 of the last 66 days, which has likely created a “comfort zone” for the cops. As long as this support is in place, the hope remains that Bitcoin will hit a new all-time high.
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