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Monday, May 22, 2023

Bitcoin Price Has Gone Back To $41K Zone

The last 25 days have seen every attempt of Bitcoin trying to break its plummeting channel interrupted pretty abruptly. And yet, the trend does point towards a region of sub- $40,000 by the middle of October, which does happen to be the deadline for the United States Securities and Exchange Commission decision on the Invesco BTC ETF and the ProShares BTC ETF.

According to the weekly report uploaded by CoinShares, the recent movement in price did trigger most of the institutional investors to move into a sixth consecutive inflow week. This was due to inflow worth $100 million between the 20th of September and the 24th of September.

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 Most of the experienced traders have claimed that Bitcoin would need to get its support of $43,600 back for the bullish trend to continue. At the same time, on-chain data does point towards some heavy accumulation- since the falling supply in exchange has been pretty dominant. 

Perpetual Bitcoin futures show traders neutral to bearish

In order to gauge the sentiment of the investor, it is important that one analyze the rate of funding on perpetual contracts- since they are usually the preferred instruments of most retail traders. Interestingly, unlike most monthly contracts, perpetual futures of Bitcoin and other cryptocurrencies trade at a price that is very similar to regular spot exchanges.

The rate of funding then gets automatically charged every eight hours from longs buyers when they end up demanding more leverage. 

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Also, unlike futures contracts, most options also get divided into two different segments. Call options usually help the buyer get more Bitcoin at a price that is fixed on the date of expiry. It has generally been seen that these are used for either bullish strategies or neutral arbitrage trades.

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