Bitcoin experienced a significant sell-off today, plunging 14% from its all-time high of $69,150 to $59,300, marking a crucial challenge for investors to reclaim the $64,000 support level. The sell-off comes amidst mixed signals from derivatives metrics, with professional traders maintaining a slightly bullish stance despite the short-term volatility.
Derivatives metrics neutral-to-bearish amidst price correction
While the sharp correction in Bitcoin’s price may seem attributed to funding rate fluctuations, derivatives data suggest a more nuanced picture. Professional traders, who often favor monthly future contracts to mitigate variable funding rate costs, continue to exhibit cautious bullish sentiment.
The BTC futures premium, which stood at 15% during the recent price move, indicates sustained optimism among whales and market makers, suggesting resilience even if support levels fluctuate between $62,000 and $64,000.
Bitcoin options market signals Caution
Analysis of Bitcoin options metrics provides further insight into traders’ sentiment. The 25% delta skew, a key indicator of arbitrage desks and market makers’ pricing for upside or downside protection, currently sits at -7%, hovering between neutral and bullish territories.
This sentiment contrasts with the excessive optimism observed on Feb. 19, when the indicator reached -12 %. Hence, the options market suggests that professional traders remain unconvinced about Bitcoin’s immediate surge beyond $70,000.
Spot Bitcoin ETF inflows challenge traditional market dynamics
A noteworthy development in Bitcoin’s market dynamics is the influx of capital from gold into spot Bitcoin exchange-traded funds (ETFs). This trend indicates a potential shift in investor behavior, as some seek refuge in Bitcoin amid uncertainty rather than traditional safe havens like short-term bonds and cash positions. Consequently, this influx could sustain bullish momentum for Bitcoin, irrespective of traditional market performance.
