The Bitcoin price (BTC) fell by up to 10% this week and while this may scare away daily traders, the 3-day chart shows that the downward movement barely had an effect on the current market structure.
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This is especially true when you consider that the $12,500 level has not been touched in more than 13 months. Analysts are currently setting a target price of USD 16,000 partly due to a gap in the WEC and the expectation of higher inflation in the United States.
The graph above illustrates how negligible the last ten days of negative performance are from a broader perspective. Bitcoin (BTC) has accumulated a 48% gain to date and there’s no evidence of weakness. The biggest daily drop in the last five months was -6.4% on August 2nd.
Headlines are not concerned with recent volatility
While short term traders are wondering if the August 28th expiration of WEC futures and options caused the drop observed over the past few days, the chain data reveals that headlines have become more solid than ever.
63% of UTXOs have not been touched in more than a year, which is unprecedented. These headlines faced a 53% drop in the 30 days prior to March 13, but not even the Black Thursday drop convinced them to move their BTC.
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Option markets show few signs of stress
The option markets offer us the real-time feeling of professional traders and arbitrage trading desks. The 25% delta bias is the main indicator of „fear and greed“ for the option markets, as it measures the cost of protection against an adverse versus a positive price swing.
These put options, which give buyers the opportunity to sell Bitcoin Investor at a fixed price at a later date, are currently 6% more expensive than a similar call option. Although this instrument isn’t as optimistic as the 13% price difference measured earlier this month, the 25% delta bias indicator can still be interpreted as bullish.
Major traders remain net long term
Some exchanges provide data on the long-term and short-term net positioning of major traders. This is an excellent way to evaluate whether professional traders are bullish or bearish.
Although individual futures markets are balanced between buyers (long term) and sellers (short term), major traders often have their risk spread over several markets.
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By aggregating these customers‘ positions, exchanges can determine the net exposure of the major traders.