Crypto Exchange Data Indicates BTC Price Break Made Crypto Traders Long

The sentiment of professional traders within the Bitcoin (BTC) market isn’t easy to read, with only a few indicators capable of accurately gauging it. Analysts typically rely on the derivatives market and technical analysis to determine whether or not market participants are bearish or bullish in sentiment. However, these measures typically mix retail flow, as well.

The Few Indicators Going Bullish

In recent times, some exchanges have opted to create internal metrics, ones that exclusively measure the positions of the top traders. When you look at the data provided by exchanges, it highlights the long-to-short positioning. As it stands now, a 30-day high can be seen on the long/short positions at the Binance exchange, which could be good news for the crypto industry.

Binance had only launched its futures platform ten months ago, but already stands as one of the top-5 contenders in the space. As a testament to this, Binance holds $430 million in open interest for BTC. It should be noted, however, that there’s a similar long/short ratio at the Huobi exchange’s futures market, as well.

As Wall Street Teethers in Uncertainty, Bitcoin Remains a Stable Alternative

Net Exposure For Top Traders On The Rise

The futures and options markets for Bitcoin show a favorable sentiment through two factors: A negative skew, as well as a positive contango.

By combining the options skew with the futures contango, as well as the positions of the top traders, a clear bullish sentiment can be seen. In particular, these three factors show that professional traders are bullish for the short-term.

The net long/short notional exposure for the Binance Exchange’s top BTC/USDT futures for their top traders are starting to typically favor longs. Even so, this indicator is standing at its highest level yet in Binance’s history.

As it stands now, the net exposure for the top accounts stands 12% larger than that of the shorts, which is itself a 6% increase from just three days ago.

Indicators Spanning Exchanges

Huobi has also seen a similar trend, and stands as one of the top-5 BTC futures exchanges out there. As it stands now, Hyobi’s futures market shows an open interest in the value of $640 million. What’s noteworthy is that Huobi’s indicators had previously shown net shorts to dominate the ratios, but has recently experienced a massive uptick.

Until the 21st of July, 2020, Huobi had its top trader long-to-short ratios always be below 1.00. What this means, is that the top traders of the exchange consistently favored net shorts. However, the tide has changed, and the ratio stands at 1.14, the highest it’s been in thirty days’ time.

Leave a Reply