The price of Bitcoin, 7.75% below its all-time high, has hit resistance. The derivatives data suggests that the pro traders are estimating a surge to $80,000 this January. When it comes to technical analysis, the longer the trend, the higher the odds it would prevail.
The data provided by the on-chain analytics firm, Glassnode supports this theory and shows that the long-term investors are now focusing on diversifying their portfolio using altcoins while stopping net accumulation. Willian Clemente, the data analyst, believes that the recent net selling of long-term investors was the first signal on selling in 6 months. According to him, their strategy is a sell-into-strength move.
In order to improve the scripting and privacy capabilities, the Bitcoin network received an upgrade on Nov. 14. The upgrade should create a potential selling event as the users highly demand the upgrades.
Pro-traders remain Neutral
Analyzing the futures basis rate will help you understand where the bullish and bearish professional traders are leaning toward. This indicator is the futures premium. It is used for measuring the difference between the current spot market levels and the longer-term futures contracts.
A healthy market tends to provide between 5% to 15% annualized premium, also referred to as contango. The sellers who demand more money to withhold settlement longer create this price difference. After Bitcoin accumulated 14% gains in 3 days, the spike went up to around 20% on Nov. 9. This brief period of excessive optimism was reversed. Bitcoin had a 9% correction after hitting the all-time high of $69,100 on Nov. 10. The basis indicator now stands at a 12% rate which is considered a relatively healthy rate, signaling confidence.
Options traders on bearish tendencies
Analyzing options markets helps to exclude externalities that are specific to the futures instruments only. The 25% delta skew highlights the calls and the put options. The metric will turn positive when the market fears since the risk call options are higher than the protective put options. The opposite also holds, but only when greed overcame the market and turned the 25% delta skew indicator negative.
The neutral rate for a skew indicator is between -8% and +8%, with -8% being the greed and +8% being the fear. The last time this indicator exceeded this range was on Sept. 29, when it reached the rate of +10%. On that day, the marked experienced the end of a 23-day bear movement. It was this very movement that took Bitcoin from $52,700 to $41,000.