Bitcoin Completed Bottom at $114.7K: Professional traders continue to buy

The key takeaways

• Bitcoin option skews and stabilitycoin activity indicate that fear is contained. This indicates that downside pressure will be limited.

• The spot BTC ETF flow and the top traders’ positions confirm that liquidity is high and indicate a potential recovery above $120K.

BitcoinBTC() dropped to a 11-day low on Monday of $114.755, sparking controversy over whether the record high of Thursday signaled an end to the current bull market. Four distinct indicators indicate that the correction may only be temporary, and Bitcoin could soon reach the $120,000 level. 

It is important to note that the word “you” means “you”. Bitcoin options The skew index reached its highest level in the last four months. This indicates a sudden, excessive and unfounded fear. Under balanced conditions, skew would move between -6% to +6%. The indicator moves above the neutral range when demand for put options that provide protection increases. Periods of FOMO will push the indicator below.

In the past, such events have often created strong purchasing opportunities. In six days, a similar jump in the skew on August 5 was followed by an increase of $9 657. When Bitcoin fell to $74,587 in April, the skew reached 13%. This set the stage for an 11474-dollar recovery within four days.

Some investors fear that Bitcoin will soon be out of spot. exchange-traded funds The (ETF) market could be about to start, especially since a streak of seven days inflows has ended. The panic, however, seems to be misplaced. In the period between July 31 and August 5, ETFs recorded net outflows of $1.45 billion, translating into a modest correction of 6% to $112,000.

Since spot Bitcoin ETFs are a market of $152 Billion, 1% outflows or inflows should be considered as normal. Due to the reduced volatility of recent months, there is enough liquidity for large ETF redemptions. The last time Bitcoin increased by more than 12 percent in a 72-hour period was on April 7.

Bitcoin’s biggest traders didn’t reduce their positions, confirming the bullish theory

Top traders on OKX and Binance have not shown much reaction to recent price drops. These data include spot, margin and futures marketsIt offers a wider view on how players in the profession are placed.

Although the top traders have reduced their longs, since Thursday and Friday they’ve stabilized. Some traders may say they hesitated to purchase the dip of $115,000 but it’s equally likely that they were waiting for an eventual retest at $112,000, before investing additional capital.

Demand for stablecoins in China provides additional perspective. Retail activity typically pushes stablecoins up to a 2 percent premium over the US dollar official rate. In contrast, discounts above 0.5% are often the result of traders selling their crypto.

Related: Strategy adds $51M in Bitcoin as price hit $124K ahead of sharp dip

Tether) is not available in the United States.USDT() is trading at a discount of 0.8% in China. This indicates a mild push to exit the crypto market. As of Friday evening the number has not changed, which indicates that sentiment is stable.

Taken together, these four metrics — options skew, ETF flows, top trader positioning, and stablecoin demand — suggest Bitcoin’s pullback was a temporary setback and point to $114,755 being the likely bottom of this correction.

The article does not provide legal advice or investment recommendations and it is intended only for informational purposes. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.