Somewhere, deep in the bowels of the internet, there’s a secret channel that connects the world’s biggest Bitcoin traders to a secret bitcoin price indicator. No one knows what the signal is, and no one is sure if it works, but the traders are using the secret signal to edge their way into ever bigger profit potential.
Over the last week or so, Bitcoin has been quite active. There have been a lot of new Bitcoin-related companies, but the biggest investor in all this was Bitcoin’s largest exchange, Bitfinex.
Bitcoin is in a bear market, and it shows. Every time the USD price of Bitcoin dips, you can see pro traders (who are profiting from the price) place buy orders for Bitcoin at a massive rate. That number keeps growing, and is now approaching an all-time high. And just like you can see this in the USD BTC market, you can see this in the BTC USD market as well. To show you how big these buy orders are: they are at a rate of ~$1 billion per day, which is 22 times greater than the amount of BTC that was traded in the last 24 hours.. Read more about ethereum price and let us know what you think.
Bitcoin (BTC) may have failed to hold the $42,000 support level, which many see as a negative indication. Surprisingly, the drop came soon after Saudi Aramco, the country’s biggest oil producer, denied claims to have begun mining Bitcoin.
Top exchange traders took advantage of the chance to increase leveraged long bets, indicating a strong bullish trend. Furthermore, margin traders have increased their stablecoin borrowing, suggesting that whales and professional traders believe cryptocurrencies will continue to rise in value.
According to Glassnode, the 24 percent weekly rise that propelled Bitcoin from $34,000 to its highest level since May 20 was driven by a 30 percent increase in the number of “active entities.” Despite the poor price performance, this signal may have prompted these astute traders to expand their holdings.
Pro traders are buying below $40,000 with leverage.
OKEx top traders BTC long-to-short ratio (above) and BTC price at Bistamp in USD (below). Source: OKEx & TradingView
Take note of how top OKEx traders raised their Bitcoin longs from 0.68 on July 31 to 1.16 two days later. The long holdings of those whales and professional traders were 32 percent lower than their corresponding short bets, which benefitted from a price drop, according to a 0.68 ratio.
The 1.16 long-to-short ratio, on the other hand, supported bullish positions by 16 percent and showed optimism even when Bitcoin’s price fell below $40,000 on August 2.
However, there is no way of knowing whether the traders successfully increased long holdings or closed short ones. Margin lending data must be examined to get a better understanding of this trend.
Lending markets offer more information.
Margin trading enables investors to borrow bitcoin in order to increase the size of their trading position and therefore their profits. To purchase cryptocurrencies, for example, one may borrow Tether (USDT) and so increase their exposure. Borrowing Bitcoin, on the other hand, can only be used to short it, speculating on a price drop.
The balance between margin longs and shorts isn’t always matched, unlike futures contracts.
Margin lending ratio OKEx USDT/BTC OKEx is the source of this information.
The ratio rose from 2.00 on July 30 to 2.50, indicating that traders have been borrowing more Tether lately. In absolute terms, the data is optimistic since the indicator supports stablecoin borrowing 2.5 times. It also demonstrates resiliency in the face of recent BTC price declines.
Even when Bitcoin retreated 9% from its $42,600 high in the early hours of August 1, derivatives data shows that OKEx top traders increased long bets.
These giants, unlike ordinary traders, can survive some rough seas, despite the fact that neither the long-to-short indicator nor margin lending exhibit indications of undue leverage.
Longs seem to be optimistic in the face of a natural pullback that followed an 11-day surge.
The author’s thoughts and opinions are entirely his or her own and do not necessarily represent those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.
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