Bitcoin News

Bitcoin Derivatives Favor Further BTC Price Rally Toward $30K

Bitcoin $28,007 was optimistic last week despite regulatory pressure and poor macroeconomic conditions. Professional traders have leveraged long bets in futures and margins, signaling strength.

On April 4, the Texas Senate Committee on Business and Commerce approved removing incentives for state-regulated miners. Senate Bill 1751 would restrict emergency power system load reduction payments in Texas. U.S. unemployment benefit applications for the week ending March 25 were raised up 48,000 to 246,000, raising the probability of a recession.

On April 6, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that increased interest rates will continue to hurt U.S. and European economies. “Concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks — now is not the time for complacency,” Georgieva said.

On April 6, St. Louis Federal Reserve President James Bullard dismissed economic concerns related to financial stress. Bullard said the Fed’s response to banking sector instability was “swift and appropriate” and that “monetary policy can continue to put downward pressure on inflation.”

To comprehend experienced traders’ market positioning, let’s look at derivatives measures.

Margin markets allow investors to leverage their positions by borrowing Bitcoin. Borrowing stablecoins and buying Bitcoin increases exposure. Bitcoin borrowers may use only short BTC/USD.

Over the last week, OKX traders’ margin lending ratio has favored BTC longs at 28x. If whales and market makers had anticipated a price decline, they would have borrowed Bitcoin for shorting, lowering the signal below 20x.

The top traders’ long-to-short net ratio eliminates margin market-specific externalities. Aggregating spot, perpetual, and quarterly futures holdings helps analysts determine if professional traders are optimistic or bearish. Changes, not absolute figures, should be emphasized because exchanges employ various methods.

Binance’s top traders’ long-to-short ratio dropped from 1.17 to 1.09 between April 1 and 7. Since March 18, Huobi’s top traders’ long-to-short ratio has been near 1.0. The ratio fell from 1.00 on April 1 to 0.95 on April 7, balancing longs and shorts. 

Finally, OKX whales showed a distinct trend, falling from 1.25 on April 3 to 0.69 on April 5, supporting net shorts. As the long-to-short ratio restored to 0.97, those traders rapidly bought Bitcoin using leverage. Since the Bitcoin price climbed 41.5% between March 10 and March 20 and held $28,000, the Bitcoin margin and futures markets remain neutral, which is good news.

The SEC’s Wells notice against Coinbase on March 22 created considerable regulatory uncertainty, which supports price appreciation. Investors will worry about inflation until the economic crisis accelerates, and Bitcoin inflows should hold $28,000 as a barrier level.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.