Originally published on: December 06, 2024
In a surprising turn of events on December 5, Bitcoin experienced a drastic intraday price swing of $12,396, hitting a low of $91,463. Analysts estimated that over $4 billion in leveraged BTC futures were liquidated during this volatile period, surpassing previous records.
What caught the attention of many was the rapid $5,160 rebound within 15 minutes of hitting the low, with buyers staunchly defending the $96,500 support level. The resilience of buyers coupled with positive Bitcoin derivatives metrics indicates that traders are maintaining their confidence in the ongoing uptrend.
When gauging market sentiment, looking at Bitcoin’s margin markets is key. These markets allow traders to borrow stablecoins to buy spot Bitcoin or borrow BTC for short positions. Currently, the Bitcoin long-to-short margin ratio at OKX stands at 20x in favor of long positions, indicating strong bullish sentiment.
To understand if whales are changing their stance post the recent rejection at $103,500, analyzing data from BTC futures markets is crucial. At Binance, the long-to-short ratio sits at 1.65, signaling a preference for long positions, while OKX traders have also turned more bullish with a ratio of 1.37. These metrics align with a bullish bias among professional traders.
Additionally, examining Bitcoin options market data can offer insights into market sentiment. The 25% delta skew is key in determining overpriced options against upward or downward movements. Currently at -8%, the skew indicates continued optimism as put options trade at a discount compared to call options.
Despite uncertainties in surpassing the $103,500 all-time high, strong confidence among traders is evident in derivatives metrics. Even if the price dips to $90,000, it is likely viewed as routine profit-taking following Bitcoin’s recent impressive rally. Investors remain bullish on Bitcoin’s future prospects.
