Bitcoin (BTC) may have fluctuated between $ 57,000 and $ 59,500 in the past two days, but large traders on major stock exchanges have increased their long positions. A similar move took place with monthly futures contracts as the base rate rose.
After hitting an all-time high of $ 61,750 on March 13, Bitcoin is trying to find new support levels. Although BTC was initially $ 54,000, it looks like there is now decent buying activity at around $ 57,000.
Although the optimism of professional traders (as measured by their long-term exposure to short and premium futures contracts) has dropped significantly, their interest appears to be growing, and this is an optimistic sign.
Large traders have increased their long positions
The Long and Short Position Index is calculated for large traders who use standard client positions, including spot contracts, margin, fixed contracts and futures contracts. This calculation provides a broader view of the effective net position of professional traders by collecting data from multiple markets.
Despite the discrepancies between cryptocurrency exchange methods, analysis of changes over time provides insight.
Top traders OKEx played right on the recent bitcoin price move when they bought a dip on March 15 that shifted to 1.35 in favor of long positions, the highest level in two weeks.
Leading retailers Huobi showed similar results, but on a smaller scale, increasing the ratio from 0.80 to 0.90. Keep in mind that this does not necessarily mean that these traders are on the decline, as 10% of the net short position has been averaged over the past 30 days.
Finally, top traders at Binance cut their long positions after the BTC crash on March 15, but have since maintained a ratio of 1.21, favoring long positions at 21%.
Overall, the average long or short position for large traders changed from 1.03 (unchanged) on January 14 to the current value of 1.15, which is in favor of net length. So it is clear that the arbitration agencies and the whales extended the completion timeline during the $ 500 million liquidation that occurred on March 15th.
The future premium has grown in recent days.
To effectively assess whether professional traders have become optimistic, you should monitor the futures premium (also known as the basis). This indicator measures the price gap between the prices of futures contracts and prices in the regular spot market.
Typically three-month futures contracts are traded at an annual premium of 6% to 20%, with sellers asking for a higher price to delay settlement, thus creating a spread.
Notice how the index dropped 20% on March 17 before BTC jumped from $ 55,500 to $ 58,000. Since then, the base has improved to 25%, indicating that professional traders have increased their net long positions.
This data supports the exchange rate from long to short and demonstrates investor confidence in bitcoin to exit a short-term full-time strategy.