Bitcoin (BTC) has been below $45,000 for 14 days and is currently 40% below the $69,000 all-time high. This movement holds similarities to late-Sept. 2021, when Bitcoin price flat-lined for 11 days and was 36% below the previous $64,900 all-time high on April 14.

To understand whether the current price momentum mimics late September, traders should start by analyzing the Bitcoin futures contracts premium, which is also known as "basis." Unlike a perpetual contract, these fixed-calendar futures do not have a funding rate, so their price will differ vastly from regular spot exchanges.

By measuring the expense gap between futures and the regular spot market, a trader can gauge the level of bullishness in the market. Excessive optimism from buyers tends to make the three-month futures contract to trade at a 15% or higher annualized premium (basis).

For example, earlier in September, the basis rate ranged from 9% to 13%, indicating confidence, but on Sept. 29, right before Bitcoin broke out above $45,000, the 3-month futures premium was at 6.5%. Generally, readings below 5% are typically deemed bearish, so a 6.5% reading in late September meant investors were displaying low confidence.

Regarding the current market conditions, there are a lot of similarities to September 2021, right before Bitcoin broke $45,000 and initiated a 62% rally. First, the current Bitcoin 3-month futures premium stands at 6.5% and the indicator recently ranged from 9% to 11%, reflecting mild optimism.

Unexpected positive market moves happen when investors least expect it and this is precisely the scenario happening right now. To confirm whether this move was specific to the instrument, one should also analyze options markets. The 25% delta skew compares