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18 January 2021

Key Bitcoin futures metrics show traders are bullish despite flat BTC price

Key Bitcoin futures metrics show traders are bullish despite flat BTC price


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This suggests that investors are beginning to realize that a more extended period of consolidation could be possible after a 77% hike since October.

This move signals that investors are either waiting for a $20,000 resistance break or fearing a potential negative price swing.

The above chart shows how Bitcoin has managed to gain market share this week.

This data indicates that traders remain optimistic, although they are far from being overleveraged.

Such a situation, also known as backwardation, indicates that the market is turning bearish.

By measuring whether more activity is going through call (buy) options or put (sell) options, one can gauge the overall market sentiment.

Generally speaking, call options are used for bullish strategies, whereas put options for bearish ones.

A 0.70 put-to-call ratio indicates that put options open interest lag the more bullish calls by 30% and is therefore bullish.

One thing to note is that the metric aggregates the entire BTC options market, including all calendar months.

Albeit the increase, it was still favoring the more bullish call options by 30%.

Considering that 0.67 has been the average for the past 3 months, it should be deemed bullish as fewer investors are buying protective put options.

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cointelegraph.com
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