Bitcoin Surges on ETF Approval Anticipation
Bitcoin (BTC) has seen a significant price surge of 15.7% in the first six days of December. This surge is largely due to the anticipation of an imminent approval of a spot exchange-traded fund (ETF) in the United States. Analysts predict a 90% probability for approval by the U.S. Securities and Exchange Commission before January 10.
Professional Traders Wary of Bitcoin’s Volatility
Despite the recent price surge, professional traders are cautious due to the multiple rejections at $37,500 and $38,500 in November. These rejections have raised concerns about the market’s strength, particularly in terms of derivatives metrics.
Corrections are common during bullish markets, but they have led to whales and market makers avoiding leveraged long positions. Long leverage buyers have experienced forceful liquidation, resulting in losses totaling $390 million over the past five days.
Reduced Demand for Bullish Bets Above $40,000
The Bitcoin futures premium on the Chicago Mercantile Exchange (CME) indicates high demand for long positions. However, this trend does not apply to all exchanges and client profiles. Some top traders have reduced their long-to-short leverage ratio to the lowest levels seen in 30 days, suggesting profit-taking and reduced demand for bullish bets above $40,000.
By analyzing positions across perpetual and quarterly futures contracts, insights can be gained into professional traders’ stance.
Shift in Top Traders’ Positions
Top traders on OKX favored long positions on December 1 with a strong ratio. However, as the price surpassed $40,000, these long positions were closed, and the ratio now heavily favors shorts. This indicates that significant players have stepped back from the current rally.
On the other hand, top traders on Binance have shown an opposing movement, favoring longs. However, the absence of leveraged longs among top traders suggests that the rally has primarily been driven by spot market accumulation.
Options Data Indicates Cautious Whale Behavior
Data from Bitcoin options at OKX reveals an increasing demand for put options relative to calls. This suggests that some whales and market makers did not anticipate the price rally. While the indicator favored call options in terms of volume, the growing demand for put options signals a focus on neutral-to-bearish price strategies.
Conclusion: Pressure on Whales as Bitcoin Holds Above $42,000
Bitcoin’s price remains above $42,000 as anticipation grows for a potential spot ETF approval in early January. The recent rally has put pressure on whales who chose not to participate. As Bitcoin continues to hold its value, bulls may increase their efforts to pressure those cautious whales.
Hot Take: Bitcoin Surges Amid ETF Approval Anticipation
The anticipation of a spot exchange-traded fund (ETF) approval in the United States has driven Bitcoin’s recent surge. Despite concerns about the market’s strength and volatility, professional traders are cautiously navigating these conditions. While some top traders have reduced their bullish bets, others have taken advantage of the rally. The growing demand for put options suggests that some whales were caught off-guard by the price increase. As Bitcoin holds above $42,000, bulls may intensify their efforts to pressure whales who remained on the sidelines.
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