Bitcoin (BTC) appears to lack the strength to retest the all-time high of $ 67,000 that it hit on October 20 and this is making investors wonder whether or not the bullish moment has faded. Even with the price facing these hurdles, it is still premature to call the $ 58,000 support level test the beginning of a descending channel.
Among the factors limiting the rebound is regulatory uncertainty in the United States. Anne ends, partner in the government enforcement and investigation practice at Bracewell LLP and former chief trial attorney for the Commodity Futures Trading Commission (CFTC), said there are "no easy answers" for the agency to provide clear rules.
Increasing adoption, on the other hand, has been putting pressure on traditional banks to seek out cryptocurrency product offerings. For example, a major Russian private bank Tinkoff, owner of a large online brokerage service, is investigating cryptocurrency-related investment services despite the Bank of Russia withholding such launches.
This week, the Coinbase exchange reached the top spot as the most downloaded app for the US Apple Store, which is mind-blowing. Coinbase beat tech giants like TikTok, YouTube, and Instagram and this is no small feat. Coinbase was first listed on the app store in 2014 and was the most popular download in the US in 2017 and May 2021.
Professional traders stumbled but are optimistic again
To determine how bullish or bearish professional traders are, the futures premium, also known as the "base rate," should be monitored.
The indicator measures the difference between longer-term futures contracts and the current price in the spot markets. An annualized premium of 5% to 15% is expected in healthy markets, also known as contango.
This price gap is caused by participants demanding more money to hold the settlement longer, and a red alert appears each time this indicator fades or turns negative, known as "backwardation."
Notice how the sharp decline caused by the $ 58,000 stress test on October 27 caused the annualized futures premium to hit its lowest level in three weeks. Still, the indicator recovered very well to the current 17%, indicating moderate optimism.
To confirm if this movement was specific to that instrument, the options markets should also be analyzed.
The 25% delta bias compares similar call (buy) and put (sell) options and will turn positive when "fear" prevails. That situation reflects hedging put options that cost more than similar risk calls.
The opposite move holds when market makers are bullish, causing the 25% delta bias indicator to shift into the negative area. Readings between negative 8% and positive 8% are generally considered neutral.
The 25% delta bias has been hovering in the neutral zone since September 30. The latest low on October 25 was negative 6%, not enough to be considered moderate optimism. However, even Bitcoin's 12.5% โโcorrection from $ 66,600 on October 21 to $ 58,200 on October 28 was not enough to inflict fear on professional traders.
Although no bearish signs emerged from the Bitcoin derivatives market, bulls should be concerned about the possible descending channel as of October 19. If that move gets additional confirmation, traders should expect $ 60,000 to turn into resistance by November 12.
Currently, there are no signs of stress on the part of professional traders, so a correction after a 63% rally in three weeks that led to the all-time high of $ 67,000 on October 20 should not be problematic.
The views and opinions expressed here are solely those of the Author and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement involves risk. You should do your own research when making a decision.
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