Bitcoin Stalled, But Here’s Why Professional Traders Still Expect $ 80,000 By January

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Selecting a timeframe for technical analysis is always a tricky subject, but generally the longer the trend, the more likely it is to prevail. For example, those analyzing the 3-day Bitcoin (BTC) chart will undoubtedly identify an ascending channel pattern that started in late June.

Bitcoin price in USD on FTX. Source: Tradingview

The bears will also always find ways to justify their point despite the fact that Bitcoin hit new all-time highs after the consumer price spike in the United States to 6.2%, which is the biggest surge in the world. inflation in 30 years.

However, data from chain analytics firm Glassnode shows that long-term investors have stopped net accumulating and are now diversifying into altcoins. According to analyst Willian Clemente, the recent net sale of this category of investors was the first in 6 months, signaling a movement of “sell in force”.

It should be noted that the Bitcoin network was upgraded on November 14 to improve scripting and privacy capabilities. From a business perspective, this creates a potential “news sale” event, as the improvement was widely expected by the community.

Data shows professional traders are neutral to bullish

To understand how far bullish or bearish professional traders lean, one needs to analyze the base rate of futures contracts. This indicator is often referred to as a term premium and it measures the difference between longer term futures contracts and current spot market levels.

An annualized premium of 5-15% is expected in healthy markets, a situation known as contango. This price difference is due to the fact that sellers are asking for more money to withhold payment for longer.

3-month Bitcoin futures base rate. Source: Laevitas.ch

Notice the 20% spike on November 9, as Bitcoin racked up 14% gains in 3 days. This brief period of over-optimism retracted as BTC corrected 9% after the record $ 69,100 on November 10.

Currently, the core indicator sits at a healthy level of 12%, signaling the confidence of these traders.

Options traders are not so bullish

To exclude the externalities specific to the futures instrument, it is also necessary to analyze the options markets.

The 25% delta skew compares similar call (buy) and sell (put) options. The metric will turn positive when fear prevails, as the premium of protective puts is higher than similar risky calls.

The reverse is true when greed is the dominant mood, causing the 25% delta asymmetry indicator to shift to the negative zone.

Deribit BTC Options 25% delta offset. Source: Laevitas.ch

A bias indicator between -8% (greed) and + 8% (fear) is considered neutral. September 29 was the last time this indicator broke this range, reaching + 10%. Oddly enough, that same day marked the end of a 23-day bearish move that took Bitcoin from $ 52,700 on September 6 to $ 41,000.

As for the current 25% neutral delta asymmetry, it could be interpreted as a “half-full glass” as professional traders are somehow not fazed by the 95% gains since the start of the year.

The data shows that there is room for additional leverage from Bitcoin buyers, who ideally would see the price continue to trade in the ascending channel that was launched in late June.

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

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