After recovering from the recent short-term low, Bitcoin (BTC) recorded a 15% increase over three days as it rose from $ 32,400 to $ 37,200.
This was an impressive move as the BTC price has been trading in a sideways range for weeks and regardless of the reasons behind the rise, you would expect major traders and arbitrage desks to follow the trend.
Interestingly, this is not the case as many of the top traders opened short positions when BTC started its 15% move. Even if a trader is not confident in a possible retest from all-time high of $ 42,000, he will open shorts while Ether (ETH) explosions by $ 1,600 seems risky.
Note how both leading cryptocurrencies tend to trade mostly consecutively, even though investors could rotate from BTC to Ether due to their role in decentralized financing, explosive price hike and the allure of Eth2 strike.
Data from TheTie, an alternative social analytics company, found that too Google searches for ‘buy crypto’ had recently reached a record high. According to the same source, there has been a 135% increase in cryptocurrency social media activity in the past three months.
In addition to this optimistic scenario, Visa announced that this is the case aggressively pursuing cryptocurrency partnerships, including debit cards and digital banks.
Finally, a recent outflow of 15,200 BTC ($ 515 million) at Coinbase was considered a “ bullish signal ” by analysts at CryptoQuant. According to CryptoQuant, the outflows indicate an ‘OTC deal from institutional investors’ who may be accumulating BTC in cold wallets.
These bullish signals contrast with exchange-provided traders’ long-to-short net positioning. This indicator is calculated by analyzing the client’s consolidated position on the spot, perpetual contracts and futures contracts and provides a clearer picture of whether professional traders are bullish or bearish.
With this in mind, there are occasional discrepancies in the methodologies between different exchanges, so viewers should track changes rather than absolute numbers.
Over the past three days, top traders have increased their short on each exchange analyzed. While major traders, market makers and arbitrage desks can take positions in their cold wallets or grayscale GBTC funds, the long-to-short ratio shows that there is a lack of confidence as to whether BTC will push through $ 38,000 and hit the $ 40,000 level pursue. short-term.
Additionally, Ether’s recent outperformance could have been fueled by top traders who reduced exposure to BTC. This makes even more sense given the upcoming CME ETH listing on February 8th. It is only natural for the appetite to increase among institutional investors.
Top traders could also have taken their BTC off the exchange in search of better return opportunities, so assuming they have all taken short positions is a hasty conclusion.
If these top traders were to take BTC short positions, there would be signs in the derivatives markets. To refute this theory, Friday’s $ 1 billion options expire still prefers bulls, which currently have a lot of incentive to push the price above USD 40,000.
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