The indicator shows pro traders becoming bullish on Bitcoin price

Yesterday’s 6% price spike in the Bitcoin price was a great relief for the investors, but it would be premature to call it the bottom.
Yesterday’s 6% price spike in the Bitcoin price was a great relief for the investors, but it would be premature to call it the bottom.

Yesterday’s 6% price spike in the Bitcoin price was a great relief for the investors, but as per directive metrics, it would be premature to call it the bottom.

This is also evident as the Bitcoin price is still around 15% lower than the all-time high mark at $69,000, achieved on November 10. After an abrupt correction of around 22% at $53,500, the coin finally showed some greens.

The recent reversal trend seems to be encouraged by MicroStrategy’s shopping of 7,002 Bitcoins on Monday at a price of around $59,187 per coin. The company said that they raised funds by selling 571,001 shares from October 1 to November 29, resulting in a total of $414.4 million in cash.

The bullish scenario intensified when Deutsche Boerse, the German stock market operator, announced the listing of the Invesco Physical Bitcoin ETN (exchange-traded note). Invesco, before this, dropped its application for Bitcoin futures ETF.

Data shows Bitcoin traders neutral-to-bullish attitude

There is a need to analyze the futures basis rate for understanding how the bearish and bullish professional traders proceed. This indicator measures the difference between future contracts and the currency spot market at different exchanges and is also called futures premium.

Whales and arbitrage desks always prefer the quarterly futures for Bitcoin, which might seem a bit complicated for retail traders because of their settlement date and difference from spot market price. However, the benefit here is the absence of fluctuating funding rate.

Bitcoin
Source: Laevitas.ch

Sellers demand an increase in the price by postponing settlement resulting in this price difference.

If we look closely at the November 27 movement, we can see a 9% bottom when Bitcoin tested $56,500 support level. On November 29, when Bitcoin rallied above $58,000, the indicator moved back to a healthy 12%, but there was a lack of excitement. 

Crypto market is definitely going to grow in the long-run amidst the increased inflation rate. As TheCoinRise reported, Gold price also spiked recently.