3 key indicators show that despite the resistance of 12,000 USD, the bulls still control the price of Bitcoin

The price of Bitcoin (BTC) has fallen by 10% this week. Although this may be terrible for day traders, the 3-day chart shows that the downward trend will hardly have any impact on the current market structure.

This is especially true considering that Bitcoin has not touched $12,500 in the past 13 months. Currently, analysts have set a target price of $16,000 because of the gap in the Chicago Mercantile Exchange (CME) and the expectation that US inflation will rise.


Bitcoin 3-day chart, USD Source: TradingView

The above chart illustrates from a broader perspective how irrelevant the negative performance of the past ten days is. So far this year, the yield of Bitcoin (BTC) has reached 48%, and there is no sign of weakness. August 2 created the biggest one-day drop of 6.4% in the past five months.

Bitcoin holders are immune to recent volatility

Although short-term traders are speculating whether the expiration of CME futures and options on August 28 caused the decline in the past few days, on-chain data shows that holders are stronger than ever.


Bitcoin unused UTXO for 1 year Source: LookIntoBitcoin

63% of UTXO has not been used for more than a year, which is unprecedented. In the 30 days before March 13, these holders faced a 53% risk of falling, but even the crash of “Black Thursday” did not prompt them to transfer their bitcoins.

There are few signs of tension in the options market

The options market shows the real-time sentiment of large traders and arbitrage trading platforms. The delta skew of the option market is 25%. It is the main “fear and greed” indicator of the options market because they measure the cost of preventing unfavorable price fluctuations relative to favorable price fluctuations.


Bitcoin 3-month option delta skew is 25% Source: Skew

These put options provide buyers with the opportunity to sell bitcoin at a fixed price in the future, which are currently 6% more expensive than similar call options. Although the tool is not as optimistic as the 13% spread measured earlier this month, the 25% Delta skew indicator can still be interpreted as bullish.

Top traders are still net long

Some exchanges provide data on the net long and short positions of top traders. This is a good way to judge whether professional traders are bullish or bearish.

Even if a single futures market maintains a balance between buyers (long) and sellers (short), top traders usually spread the risk across multiple markets.

By aggregating the positions of these customers, the exchange can determine the net exposure of top traders.


Top traders go long/short Source: Binance, OKEx and Cointelegraph

Since July 27, top traders in Binance and OKEx have been bullish. Considering that the price of Bitcoin plummeted by $1,500 on August 2, this in itself is an amazing feat.

Decrease in futures market liquidation

By measuring the liquidation of futures contracts during negative price fluctuations, one can estimate the vulnerability of the buyer (long). It should be remembered that there have been four intraday price fluctuations of 9% or more in the past three months.


Bitcoin (USD) Source: Bitstamp and Cointelegraph

If these traders use leverage of 10 times or higher, they will be caught off guard, and these leverages would have been forced to liquidate their positions. As a result, open futures positions will be greatly reduced.


Total open interest of BTC futures, USD source: Bybit & Cointelegraph

The total amount of open interest in BTC futures has increased by 166% in the past five months, reaching $4.8 billion. These data provide further evidence that the recent 10% drop did not result in the liquidation of the whales.

Every bull market has occasional corrections

In the last two weeks of July, Bitcoin rose by 28%. As Bitcoin (BTC) consolidates, there will definitely be some selling pressure. Even in the three-month up 240% bull market that began in early April 2019, there have been four short-term corrections of 9% or higher.

Despite this, on-chain data and sentiment generated by top traders through derivatives are still bullish. This indicates that the market will tend to be neutral or move upward in the next few weeks.

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