3, 2021, Bitcoin initiated a 25.6% correction that lasted 18 hours and culminated with a $42,360 low.
Much has changed over that period, and hard evidence comes from other sections of the sector.
These investment vehicles in Canada have increased their holdings by 6,594 BTC since January to a historical high of 69,052 BTC under management.
To understand how professional traders are positioned, including whales and market makers, let’s look at Bitcoin’s futures and options market data.
The Bitcoin futures annualized premium should run between 5% to 12% to compensate traders for “locking in” the money for two to three months until the contract expiry.
Even though this occurred, there are no signs of confidence from pro traders, according to the futures premium.
Currently, Bitcoin seems to lack the strength needed to break the $47,000 resistance, but traders should use derivatives to gauge professional investor sentiment.
Data shows that the skew indicator has been ranging between 0% and 8% since March 9.
Two positive effects will arise from that event: a short squeeze from derivatives markets and room for buyers to use futures for leverage.
If Bitcoin’s futures premium had been running above 10%, traders would face a much higher cost to add long positions.