There are only a few indicators that can accurately capture the mood of professional Bitcoin traders (BTC). To determine whether market participants are bullish or bearish, analysts generally rely on markets for technical analysis and derivatives, although these generally mix the retail flow.
Recently, some exchanges have created internal metrics that measure only the positions of the main traders. A look at the data of an exchange that highlights long and short positioning of traders shows that the indicator currently shows a maximum of 30 days in long / short positions in Binance.
Despite the launch of its futures platform just ten months ago Binance is one of the top 5 competitors with an open stake of $ 430 million in BTC. A similar long-term / short-term relationship has been observed with Huobi futures.
The Bitcoin futures and options markets confirm such a favorable thesis by showing a positive infection and a negative trend.
By combining three indicators (positions of main traders, distortion of options and contango of futures) There is undeniable evidence that professional traders are optimistic in the short term.
Long-term / short-term relationship of the main dealers
The long-term / short-term net exposure of the major BTC / USDT futures traders in Binance generally favors the long-term, but the indicator is now at its highest level.
Long / short term relationship of the main Binance dealers. Source: Binance
According to the graphic above The net exposure of the main accounts is currently 12% higher than that of the short positions. This is an increase of 6% compared to three days ago.
Huobi, also one of the top 5 BTC futures markets, It shows a similar trend and currently shows an open interest of USD 640 million. It is noteworthy that the Huobi indicator shows a more significant recovery because the network shorts in the previously dominated relationship.
Long-term / short-term relationship of the main Houbi dealers. Source: Bybt.com
The long-term / short-term ratio of Huobi’s top traders was less than 1.00 on July 21, favoring net shorts. On that day, the tide has turned and the ratio is currently 1.14, the highest level in 30 days.
Bitcoin Futures Contango has held steady
The premium for 1-month Bitcoin futures contracts, referred to as the base, has maintained a healthy positive level.
Basis for 1-month bitcoins futures. Source: Skew
1-month BTC futures on OKEx and Kraken have held a premium of 7% or more at the current spot level, which indicates Contango. This indicator improved from a neutral rate of 2% earlier this month.
Bitcoin options have also become bullish
Bias is a useful metric to measure the mood of professional traders using price options. By comparing the implied volatility of put and call options, it can be determined whether the purchase of call options (bullish) or put options (bearish) is more expensive.
25% delta bias of Bitcoin’s 1 month options. Source: Skew
The graph above shows that the 25% delta bias of the 1 month options was down. A negative indicator means that the implied volatility of purchases is more significant than sales, indicating higher insurance costs for a favorable price movement.
While this isn’t necessarily a bullish indicator in itself (as other factors can affect the price of options), This turnaround is undeniably an indicator of the positive mood among professional operators.
The three indicators are bullish
Currently, the main traders’ net positions, the trend in options and the futures contango mean a short-term upward trend for professional traders.
Since all indicators became bullish, Bitcoin’s price showed strength by breaking resistance at $ 9,400 on July 22.
Large and seasoned traders seem to be betting that the $ 10,000 level could be tested earlier than expected. With the growth of stable coins, there is an even greater chance of continuing the upward trend.
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