Cryptocoin – Bitcoin price is on the threshold of $ 19,000, but the long-short rate of crypto exchanges shows that the best investors are cautious at these levels.
This week, the Bitcoin (BTC) price rose to a 3-year high of $ 18,965, leading investors to believe a new all-time high of over $ 20,000 on cards.
While these levels are exciting, the data shows that some professional investors are concerned about prices at these levels, and the absence of retail FOMO calls for a sharp retreat for some.
84 Percent Increase
The data show that Bitcoin has not seen a decline of more than 5% since September 4, and digital presence has increased by 84% in the past 77 days. Similar price action was last seen on November 25, 2019.
Back then, BTC made a 47% move from $ 6,900 to $ 10,150 in a series of 86 days until mid-February 2020. It should not be concluded, however, that a significant correction necessarily follows every move without a 5% daily drop.
Evidence of such different expectations can be derived from the basis of futures contracts. Typically, the indicator should show a 3% to 10% annual premium.
Lack of optimism
Traders are stunned by this unusual trend, and the data confirm a complete lack of faith. Although the BTC futures premium is currently in the bullish zone, it does approve the purchase indiscriminately.
To effectively gauge whether professional traders are holding long positions during this rally, investors should monitor the short-long odds of top traders on the leading crypto exchanges.
In Huobi, we can see top investors entering a net short position as Bitcoin surpassed $ 16,000 on November 16. On November 19, several downside claims emerged as BTC failed to break the $ 18,000 resistance. Once again, they were quick to cover their losses and are now fixing. Therefore, it can be assumed that professional traders are trying to predict a local peak without much belief.
Interestingly, data from Binance shows that the top traders are adopting a different strategy. Despite this, it still reflects a lack of belief, as can be understood below.
Binance’s top investors had a 10% net long position, while Bitcoin rose above $ 16,000 but later struggled to buy it after surpassing $ 17,500.
It is worth noting that exchanges collect the data of the top traders differently, as there are multiple ways of measuring the clear orientation of customers. Therefore, any comparison between different providers should be made on percentage changes rather than absolute numbers.
All in all, the data point to some indecision, or at least a strong lack of faith, among top traders. While the market is sending mixed signals, it makes sense not to sit tight and get into position. At least that’s what cautious investors do.