Bitcoin: The why and how of traders wanting to long BTC
Bitcoin [BTC] traders seem unperturbed about the king coin’s drop below $22,000. In fact, according to CryptoQuant’s evaluation of the market, traders in the derivatives market are keen on opening long positions despite the glaring bearish exposure.
How much are 1,10,100 BTCs worth today ?
The community-driven analytics platform opined that the surprising positive sentiment could be linked to the bull/bear market cycle indicator. The metric is characterized by the aggregate view of daily market participants and often corresponds with the economic cycle.
Although BTC’s price might not reflect the status, CryptoQuant confirmed that the metric is now in the bullish domain. Its report read,
“The Bull/Bear Market Cycle Indicator remains in the bull territory, and the On-chain P&L Index momentum has entered more sustainable levels”
Traders’ bias has also translated into action, as evidenced by the funding rates.
Funding rates are periodic payments made to longs or shorts based on the difference between the perpetual swaps and current spot prices.
Source: CryptoQuant
At press time, the Bitcoin funding rate was 0.0018. The metric, being positive, implied that long-positioned traders were dominant in the derivatives market. As such, they have been willing to pay funding to short positions.
Furthermore, Bitcoin whales seem to be helping the cause because their usual spending in correction periods has been low, compared to previous cycles. Low sell pressure from these deep-pocket investors could help resist the downside. CryptoQuant’s assessment further confirmed,
“Previously, whales spent over 500k BTC a day during or before price corrections, but now they chiefly spend below 150K BTC in daily terms.”
However, the optimism
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