Selecting a time frame for technical analysis is always a tricky business, but typically, the longer the trend, the more likely it is to prevail. For example, those looking at the 3-day chart of Bitcoin (BTC) will undoubtedly identify an ascending channel pattern that started in late June.
Bassists will always find ways to justify their opinions, too. despite the fact that Bitcoin has reached new all-time highs following the surge in consumer prices in the United States to 6.2%, which is the largest increase in inflation in 30 years.
Nevertheless, Data from on-chain analytics company Glassnode shows that long-term investors have stopped accumulating BTC and are now diversifying into altcoins. According to analyst Willian Clemente, the recent net sale by this class of investors was the first in 6 months, indicating a “force sell” movement.
Notably, the Bitcoin network was updated on November 14 to improve scripting and privacy capabilities. From a bargaining point of view, this creates a potential “sell the news” event, as the update was widely anticipated by the community.
Data shows professional traders are neutral to bullish
To understand how bullish or bearish professional traders are, you have to analyze the base rate of futures. This indicator is often referred to as the futures premium and measures the difference between the prices of long-term futures contracts and current levels in the spot market.
In healthy markets an annualized premium of between 5% and 15% is expected, a situation known as contango. This price difference is due to sellers demanding more money to hold the sale for longer.
Watch the 20% rise on November 9, when Bitcoin racked up 14% profit in 3 days. This brief period of excessive optimism faded as BTC corrected 9% after the all-time high of $ 69,100 on November 10.
Currently, the baseline indicator stands at a healthy 12%, indicating the confidence of these traders.
Options traders are not so optimistic
To exclude the specific externalities of the futures instrument, we must also analyze the options markets.
The 25% slope of the delta compares similar call and put options. The metric will turn positive when fear prevails because the premium for hedging put options is higher than that for similar risk calls.
The opposite occurs when greed prevails in the market, causing the delta’s 25% tilt indicator to move into negative territory.
An indicator of inclination between -8% (greed) and + 8% (fear) is considered neutral. September 29 was the last time that indicator moved outside of this range, reaching + 10%. Interestingly, that same day marked the end of a 23-day bearish move that took the price of Bitcoin from $ 52,700 on September 6 to $ 41,000.
Looking at the current 25% slope of the delta, it could be interpreted as a “glass half full” because professional traders are not intimidated by the 95% gains so far this year.
The data shows that there is room for additional leverage by Bitcoin buyers, which would ideally cause the price to continue to fluctuate within the ascending channel that began in late June.
The views and opinions expressed here are solely those of the Author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves risks, you must do your own research when making a decision.
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