Global and US economic data and several metrics related to BTC derivatives will determine whether Bitcoin repeats the $20,000 level in the short term.
After 66 agonizing days, Bitcoin
BTC

Tickers down
$22,887

The price finally broke above the $20,000 psychological resistance level on January 14. At the same time, a current market capitalization of $400 billion puts BTC among the top 20 global trading assets, beating out giants like Walmart ( WMT ) and MasterCard ( WMT ). MA), Meta Platforms (META).

On one hand, Bitcoin bulls have reasons to celebrate after its price recovered 34% from $15,500 on Nov. 21, but the bears still have the upper hand in the long run as BTC has fallen 52% in 12 months.

Traditional financial investors will closely monitor U.S. retail sales data for Jan. 18 and fourth-quarter earnings reports from Goldman Sachs ( GS ), Morgan Stanley ( MS ), Netflix ( NFLS ) and Procter & Gamble this week. (PG).

In the cryptocurrency markets, light relief comes from some unexpected places or people. Crypto entrepreneur Justin Sun is reportedly interested in acquiring funds from troubled Digital Currency Group (DCG), the parent company of crypto lender Genesis and fund administrator Greyscale.

On January 16, Binance Exchange launched an OTC settlement solution for institutional investors. Managed digital asset custody services provide additional security, allowing investors to access the exchange ecosystem without directly investing on the platform.

Other good news came from Bitcoin mining difficulty, which rose 10.26% on January 15, reflecting heightened competition for block grants – usually a bullish indicator for the industry. This increases the security of the network, but more importantly, it shows that miners can find strategic energy sources and commit to the long-term investment required to mine Bitcoin.

Let’s take a look at Bitcoin Derivatives metrics to better understand how professional traders are positioned in current market conditions.

Asia-based stablecoin premium drops to 6-month low
USD currency
USDC

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$1.00

The premium is a good gauge of demand for China-based crypto retailers. It measures the difference between China-based peer-to-peer trading and the US dollar.

Excessive buying demand pushes the indicator above 100% fair value, and in bear markets, stablecoins flood the market supply, leading to a discount of 4% or more.

USDC Peer-to-Peer vs USD/CNY. Source: OKX
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Currently, the USDC premium is 97.5%, compared to 100% two weeks ago, indicating that demand for stablecoins from Asian investors is low. The data gained significance after a 24% rally between January 7 and January 14, and stronger demand from retailers can be expected.

However, this data is not necessarily bearish as traders could dump stablecoins due to increased regulatory risks.

Futures premium is finally showing neutral sentiment
Quarterly futures are generally avoided by retail traders due to price differences from spot markets. But professional traders prefer these instruments because they hedge the fluctuation of funding rates in a perpetual futures contract.

A two-month annual futures premium should trade at +4% to +8% in healthy markets to cover costs and associated risks. Therefore, when futures trade below such a range, it indicates a lack of confidence from buyers of leverage – typically, a bearish indicator.

Bitcoin 2 Month Futures Annual Premium. Source: Laevitas.ch
The chart above shows positive momentum for the Bitcoin futures premium, now flirting with the neutral premium of 4% – a five-month high. This indicator represents a radical reversal from the pullback that lasted from the FTX crash in November to the early days of 2023.

Bitcoin needs to retest the $20,000 support
While the effortless rally to $20,000 looks encouraging, it has not been tested as a support level recently. At the same time, the lack of a stablecoin premium in Asia indicates a lack of demand from retail buyers. However, the current 2.5% discount does not reflect any restlessness or anxiety from sellers.

Related: Bitcoin On

Source: CoinTelegraph

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