Originally published on: November 04, 2024
Bitcoin has experienced a 6.7% decline between Oct. 31 and Nov. 4, dropping below the $67,500 mark for the first time in eight days. This downward trend coincided with uncertainties surrounding the Nov. 5 United States presidential election and led to the liquidation of over $190 million in leveraged long positions.
Despite this temporary bearish momentum, three key Bitcoin derivatives metrics suggest that the market remains resilient. These metrics include the long-to-short ratio of top traders on exchanges, aggregate BTC futures open interest, and stablecoin demand in China.
Traders on platforms like Binance and OKX exhibit confidence in Bitcoin’s potential for recovery as their spot and futures positions remain strong. The lack of weakness in this indicator, even after the price dipped below $67,500, is a positive sign for Bitcoin enthusiasts.
However, analysts are cautious as the outcome of the US election could influence regulatory scrutiny on cryptocurrencies. Uncertainty surrounding Kamala Harris’ stance on digital currencies could impact Bitcoin’s integration with traditional finance, creating an environment of hesitancy among traders.
Despite the potential impact of the election results, investors still see limited motivation to push Bitcoin’s price to a new all-time high. The focus on “digital assets,” such as central bank digital currencies and tokenized assets, adds to the complexity of market sentiment.
Analyzing Bitcoin futures open interest is crucial in understanding how professional traders are positioning themselves. With open interest levels remaining steady and even increasing despite recent price fluctuations, it suggests that investors are optimistic about future price movements.
In China, stablecoin trading near its fair value against the official USD/CNY rate indicates trader resilience during periods of high demand for cryptocurrency outflows. Overall, derivative metrics suggest that traders are confident in the potential for a bullish market rebound post-election.
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