Bitcoin Price Drop Completed at $114.7K: Professional Traders Continue to Buy

The key takeaways

• Bitcoin’s options skew, and the activity of stablecoins show that there is still a low level of fear.

• Spot BTC ETFs and trader positions indicate liquidity and resilience.

BitcoinBTC() dropped to a 11-day low on Monday of $114.755, sparking a debate about whether the record high of Thursday signaled an end to the current bull market. But four different indicators show that this correction will only last a short time and Bitcoin is likely to regain the $120,000 price mark in the near future. 

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 % and + 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. A similar spike in skew was followed on Aug. 5 by a rally of $9,657 within 6 days. When Bitcoin fell to $74,587 in April, the skew reached 13%. This set the stage for an 11474-dollar recovery within four days.

Many investors fear that Bitcoin will be withdrawn from the market. exchange-traded funds The (ETFs), especially after Friday’s end of a streak of seven days inflow, could be kicking off. But the panic is misplaced. The panic is misplaced.

The market for spot Bitcoin ETFs is $152 billion, so a 1% increase or decrease in the amount of money flowing into and out of an ETF over a relatively short period should be considered to be normal. Liquidity is strong enough to handle large ETF redemptions, given the recent lower volatility. It is noteworthy that the last time Bitcoin moved over 12% in less than 72 hours occurred on April 7th.

Bitcoin’s top traders have not reduced their longs. This reinforces the bullish hypothesis

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

The ratio of longs to shorts has stabilized since top traders decreased their longs on Thursday and Friday. Although some traders might argue that they do not want to invest in the $115,000 dip, it could be possible that these traders are waiting until a possible retest on $112,000 is made before adding more capital.

The stablecoin market in China is another interesting perspective. Stablecoins are usually traded at a premium of 2% over the official US Dollar rate when retail activity is strong. A discount of more than 0.5% is often indicative of fear as traders sell their crypto assets.

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

There is no Tether available at this time.USDTIn China, () has a slight discount of 0.8%. It is a sign that there are mild concerns about the market. The figure is still the same as it was on Friday night, indicating no change in sentiment.

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. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.