Bitcoin (BTC) has been trading within a narrow 7% range since November 12, signaling a period of consolidation around $91,000. Nonetheless, derivatives indicate that professional traders remain confident in the bull market. Additionally, multiple attempts to break above the $92,000 level suggest strong buying demand beyond multiple MicroStrategy BTC acquisitions.
Deribit’s Bitcoin 30-day options skew (put call) is 25%. Source: Laevitas.ch
BTC options delta skewness has fallen to its lowest level in four months, indicating that the market is pricing put options at a discount. A level below -6% suggests bullish sentiment and reflects confidence in the $87,000 support level, especially from whales and arbitrage desks.
While these data suggest optimism, they do not guarantee that investors are confident the bull market will continue. It is important to analyze the factors driving recent momentum. For example, if analysts see MicroStrategy as a major catalyst for Bitcoin’s surge to all-time highs, signs should be visible in the BTC futures and margin markets.
Is MicroStrategy the sole driver of Bitcoin’s bullish trend?
Speculation that several firms were responsible for buying activity worth more than $87,000 gained momentum after MicroStrategy revealed that it had purchased an additional 51,780 BTC on November 18. According to SEC filings, MicroStrategy currently holds more than $29 billion in Bitcoin and is actively pursuing purchasing activities. It plans to raise $21 billion through the issuance and sale of MSTR stock.
In contrast, investors believe Bitcoin’s continued price rise is more likely if net inflows into physical BTC exchange-traded funds (ETFs) show signs of early adoption, including increased exposure by pension funds and large hedge fund managers. However, the latest data for November 14 and November 15 shows that net ETF outflows reached $771 million as investors decided to take profits after the recent rally.
Analyzing the Bitcoin futures and margin markets is essential to understand where professional traders stand. For example, continued demand for leveraged BTC futures indicates bullish sentiment, while increased use of price hedging indicates whales and arbitrage desks lack confidence in current price momentum.
Annual premium for Bitcoin 2-month futures. Source: laevitas.ch
Bitcoin 2-month futures premium (base rate) soared to 17% on November 18, far exceeding the neutral standard of 5-10%. This optimism was last observed nearly eight months ago in late March, when Bitcoin successfully defended the $64,000 level after two weeks of downward pressure.
To further assess trader sentiment, it is essential to analyze the BTC margin market. Unlike derivatives contracts, which always require buyers and sellers, margin markets allow traders to borrow stablecoins to buy physical Bitcoin. Likewise, a bearish trader can borrow BTC and create a short position by betting on the price falling.
relevant: ‘I am fully committed because I have invested most of my fortune in Bitcoin’ — RFK Jr.
OKX’s Bitcoin margin short/long ratio. Source: OKX
Currently, the Bitcoin long-short margin ratio on OKX is 14x, which favors the longs (buyers). Historically, excessive confidence periods have driven the indicator above 40x, while buy preference below 5x is generally considered bearish.
Ultimately, Bitcoin derivatives and margin markets exhibit strong bullish momentum regardless of the concentration of buy-side activity led by MicroStrategy. The lack of significant impact from the retest of the $88,700 level on November 17 further suggests that investors are not ready to move on from the first negative price move.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.