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Bitcoin (BTC) recently recovered $ 35,000, but top traders at Huobi, OKEx and Binance are not buying the breakout. Unlike the savvy institutional investors who are desperate for protection from fiat’s humiliation, the more crypto-focused investors seem to be waiting for dips.

Institutional investors may also celebrate the Jan. 4 announcement that the Office of the Comptroller of the Currency (USOCC) would allow banks to include stablecoins in positions allowed by the bank. This further validates the crypto sector and could result in an increase in institutional participation in the space.

Typically, after a new record is reached, the price of Bitcoin falls as some traders take profits and bears consider opening short positions near the new ‘top’.

Crypto-focused traders are well aware of Bitcoin’s volatility and the recent dip to $ 27,000 serves as a perfect example.

To effectively measure how crypto-focused traders position themselves, investors need to keep an eye on the long-to-short ratio of the top traders on leading crypto exchanges.

Top traders BTC long / short ratio. Source: Bybt.com

Note how top Huobi traders have narrowed their long positions over the past two days. Meanwhile, Binance top traders have largely sat sideways throughout the period.

It is worth noting that exchanges collect data on top traders in different ways as there are multiple ways to measure the net exposure of customers. Therefore, any comparison between different providers should be made based on percentage changes rather than absolute numbers.

OKEx was the lone exception as the top traders’ metrics showed investors going into short positions when BTC temporarily dumped on Jan. 4, but this trend reversed when the USD 31,000 support recovered. This data indicates that those traders are chasing the market instead of placing bets prior to the move.

In general, it is safe to conclude that ‘top’ traders have not been responsible for the current bull run.

The funding rate of futures remains stable

Perpetual contracts, also called inverse swaps, have an embedded rate that is usually charged every eight hours. When buyers (longs) are the ones who demand more leverage, the funding rate becomes positive. Therefore, it is the buyers who pay the fees. This problem is especially true during bull runs, when longs are usually in higher demand.

BTC Perpetual Futures Rates. Source: Digital asset data

As shown above, the funding rate on January 4 on the FTX exchange climbed to an unusually high weekly level of 5% on January 4. Regardless of this quirk, the 1% average weekly funding rate seems exceptionally modest given Bitcoin’s 18% rise in the past six days.

At this point, it is clear that top traders on major exchanges are not the ones leading the recent buying activity. These short-term traders seem to be waiting for lower entry points based on their data of long-to-short positions and the funding rate on derivatives exchanges.

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