It is felt that BTC holders will be currently experiencing a feeling of some relief following the rise of BTC by $4,700 on Nov 29. All the same, Derivative Metrics warned that it was still very early to celebrate.
Its caution was prompted by the fact that BTC is still 15% below its peak of $69,000. The latest rise could be attributed to the announcement by MicroStrategy of having obtained 7,002 BTCs at around $59,187 for each coin. MicroStrategy raised the money by selling over 57K of its shares – to raise $414.4 million of cash.
Also, Deutsche Boerse revealed it had listed ETN Invesco Physical Bitcoin and this added to the good news coming in.
Bitcoin Price – Analsysis
However, despite the Bullish news being received, traders are still cautious. This can be gauged from the futures basis rate. BTC’s quarterly futures are what whales and arbitrage desks use to make their decisions. Derivatives are difficult to comprehend for retail traders, but it offers a huge benefit in that it does not have a fluctuating fund rate.
The annualized premium, typically for the 3-month futures is 5-15%. Despite the many swings in BTC, traders have shown little or no enthusiasm. However, the whole period can still not be labelled bearish.
Investors also often resort to margin trading. This allows them to borrow crypto and leverage their trading position, which in-turn helps them enhance the returns that they receive. Data on derivatives also shows absolutely no interest among professional traders. This despite BTC having risen 9% from its lowest point of Nov 28. Contrary to the behavior of the retail traders, the whales do not succumb to FOMO.