Bitcoin Completed Bottom at $114.7K and Pro 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.

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

BitcoinBTC() dropped to a 11-day low on Monday of $114.755, sparking debate about whether the record high of last Thursday signalled the end of this bull run. Four distinct indicators indicate that the correction may only be temporary, and Bitcoin could soon reach the $120,000 level. 

You can also find out more about the following: 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, the 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.

The history shows that such events can often lead to strong opportunities for buying. 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 ETFs could start, particularly after the seven-day streak of inflows ended last Friday. The panic, however, seems to be misplaced. The panic is misplaced.

Since spot Bitcoin ETFs are a market of $152 Billion, 1% outflows or inflows should be considered as being normal. Due to the reduced volatility of recent months, there is enough liquidity for large ETF redemptions. 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 long positions, reinforcing a bullish hypothesis

The top positions of traders on OKX, Binance and Binance are not showing much response to the recent drop in price. The data includes spot, margins and futures marketsIt offers a wider view on how players in the profession are placed.

Since then, even though top traders have reduced their longs from Thursday to Friday, they’ve stabilized the ratio of longs to shorts. 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.

Demand for stablecoins in China provides additional perspective. Stablecoins are usually traded at a premium of 2% over the official US Dollar rate when retail activity is strong. 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

The Tether (USDTIn China, ( ) has a slight discount of 0.8%. It is a sign that there are mild concerns about the market. Still, this figure remains unchanged from Friday evening and suggests that the sentiment is not worsening.

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.

This is intended as general information and not to be construed as investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.