Bitcoin (BTC) appears to lack the strength to retest the all-time high of $ 67,000 it hit on October 20, leading investors to wonder if the bullish moment has faded. Even with price facing these hurdles, it is still premature to call the $ 58,000 support level test the start of a descending channel.
Among the factors limiting the rally is regulatory uncertainty in the United States. Anne Termine, government law enforcement and investigative practice partner at Bracewell LLP and former chief prosecutor for the Commodities Futures Trading Commission, said “there are no easy answers” for the agency to provide clear rules.
Growing adoption, on the other hand, has prompted traditional banks to seek out cryptocurrency product offerings. For example, the large Russian private bank Tinkoff, owner of large online brokerage services, is looking for crypto-related investment services, even though the Bank of Russia is withholding such launches.
This week, the Coinbase exchange reached # 1 as the most downloaded app for the US Apple Store, which is mind blowing. Coinbase has beaten tech giants like TikTok, YouTube, and Instagram, and that’s no small feat. Coinbase was first listed on the App Store in 2014 and was the most popular download in the United States in 2017 and May 2021.
Professional traders have stumbled but are bullish again
To determine how bullish or bearish professional traders are, one needs to watch the term premium – also known as the “base rate”.
The indicator measures the difference between long-term futures contracts and the current price on the spot market exchanges. An annualized premium of 5 to 15% is expected in healthy markets, otherwise known as contango.
This price differential is due to participants asking for more money to withhold settlements longer, and a red alert appears whenever this indicator fades or turns negative, known as “offset.” “
Notice how the sharp drop caused by the $ 58,000 stress test on October 27 caused the annualized term premium to hit its lowest level in three weeks. Nevertheless, the indicator has recovered well to reach the current 17%, signaling a moderate uptrend.
To confirm whether this movement was specific to this instrument, it is also necessary to analyze the options markets.
The 25% delta asymmetry compares similar call (buy) and put (put) options and will turn positive when “fear” prevails. This situation reflects protective puts that cost more than similar risk calls.
The reverse movement holds when market makers are bullish, causing the 25% delta asymmetry indicator to go into the negative zone. Readings between minus 8% and plus 8% are generally considered neutral.
The 25% delta asymmetry has been in the neutral zone since September 30. The last low on October 25 was negative 6%, which is not enough to be considered a moderate uptrend. However, even Bitcoin’s 12.5% ââcorrection from $ 66,600 on October 21 to $ 58,200 on October 28 was not enough to scare away professional traders.
While no bearish signs have emerged from the Bitcoin derivatives market, bulls should be concerned about the potential downward channel from October 19. If this move is confirmed, traders should expect $ 60,000 to have become a resistance level by November 12th.
There are currently no signs of stress from professional traders, so a correction after a rally of 63% in three weeks that led to the all-time high of $ 67,000 on October 20 shouldn’t be a problem.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move involves risk. You should do your own research before making a decision.