The bitcoin price reached a year-high near $19,000 as pro traders used leverage to push the pump forward, but derivative data suggests a retest of the BTC price to $17,300 that.
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Prices have risen 15% in the past 13 days, and traders’ bearish bets on BTC futures have closed at more than $530 million against the bulls during this period
After a high of $19,000 on January 12, bitcoin hit its highest price since the FTX exchange fell on November 8. The move was largely fueled by expectations of the United States Consumer Price Index (CPI) for December , which matched the consensus of 6.5 % year -over-year — inflationary pressures likely 9% in June. revealing that they had reached the summit.
In addition, on Jan. 11, FTX lawyer Andy Dietderich said $5 billion in cash and liquid cryptocurrency was recovered — raising expectations of partial refunds of customer funds in the future Speaking to a U.S. bankruptcy judge in Delaware on Jan. 11, Dietderich said the company 4 It plans to sell $.6 billion of non-strategic investments.
Let’s look at derivative metrics to see if professional traders are excited about Bitcoin’s $19,000
The use of margin increased as Bitcoin rose to $18,300
Margin provides insight into how market professional traders are positioned, and margin is beneficial for some investors because they can borrow cryptocurrency to take advantage of their position
For example, borrowing Stablecoin to buy Bitcoin can increase exposure. Bitcoin borrowers, on the other hand, can only short the cryptocurrency because they are betting on its value falling. Unlike futures contracts, the balance between margin longs and shorts doesn’t always match.
OKX stablecoin/BTC margin debt ratio. Source: OKX
The above chart shows that the margin-to-credit ratio of OKX traders rose strongly on January 11, indicating that professional traders were adding leverage as long as bitcoin reached $18,300
More importantly, the subsequent 2% correction on January 12 that pushed bitcoin to a low of $17,920 led to a complete reversal of margins, meaning its bullish position was reduced as whale market makers would use the margin market
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Currently at 21, the metric favors stable coin loans with wide margins, indicating that bears are not confident of opening bitcoin margin shorts.
Futures traders ignored the bitcoin price pump
The longest to shortest metric excludes externalities that could only have an impact on the margin market. In addition, the exchange collects data from clients’ spots, perpetual quarterly futures contracts, to provide better insight into how professional traders are doing
There are occasional methodological discrepancies between different exchanges, so the reader should monitor changes instead of absolute data.
The Bitcoin long-to-long ratio of top traders on the exchange. Source: Coinglass
Although bitcoin broke above the $18,000 resistance, professional traders kept their leveraged long positions unchanged according to long to short indicators.
For example, Binance’s ratio of traders strengthened to 1.08 from January 9 to January 12. Meanwhile, top Huobi traders reduced their leverage length as the indicator went from 1.09 to the current 0.91 Finally, the crypto-exchange’s long to short rose slightly in favor of OKEX long, It went from 0.95 on January 9 to the current 0.97.
Traders using futures contracts were not confident enough to add leveraged bull positions even as prices rose.
Related: BTC supply returns to 13% gain as bitcoin sees ‘huge’ accumulation
Bitcoin price could test $17,300 again
Margin data shows enough leverage was applied to push bitcoin above $18,000, but it suggests the situation was only temporary. In most cases, those professional traders accumulated higher margins and consequently reduced their leverage after the event. In essence, this metric looks very healthy, as it indicates that margins are not overbought by the market.
As with the top traders from long to short, the lack of demand for leveraged longs using futures contracts is of some concern, but at the same time leaves room for excess buying power
From a derivatives perspective, even if bitcoin retests $17,300, the bulls should not be concerned, as derivative indicators show low demand from short sellers and not too much leverage from buyers.