An important Bitcoin price metric shows that the best investors are comfortably positioned and expects BTC to secure the $ 50,000 level in the short term.
Bitcoin (BTC) price rose 25% after news of Tesla’s $ 1.5 billion BTC investment. Before this announcement, BTC was behind 7.5% of Ether’s (ETH) performance. But numerous bullish events over the past few days have helped BTC reach its all-time high of $ 48,900.
Before Tesla’s announcement, the BTC price was trading in the range of $ 30,000 to $ 41,500 for about 3 weeks, and when the price fell, professional traders and arbitrage tables were expected to follow the upward trend.
With BTC launching its 25% move, most of the top traders opened short positions rather than trading long. This seems risky given that this week Bitcoin received praise from JPMorgan’s co-chair and regulators approved a BTC ETF approval in Canada.
Historical data shows that Bitcoin price movements tend to trade with Ethereum, which has been on a strong rise for months. In addition to this bullish scenario, Bitcoin’s Lightning Network announced a record number of nodes, and the total value locked (TVL) exceeded $ 42 million.
Mastercard also announced that it will support cryptocurrency payments in its network by the end of 2021.
These bullish signals contrast with long-short net positioning metrics provided by major cryptocurrency exchanges.
This indicator is calculated by analyzing the consolidated position of clients on instant, permanent and futures contracts, providing a clearer view of whether professional traders are looking for a bullish or bearish trend.
It is important to remember that there are occasional discrepancies in methodologies between different exchanges. For this reason, viewers should watch changes rather than absolute numbers.
Since February 8, when the Tesla announcement was made, the top traders of the exchanges have relatively not changed their net positions.
Prior to Bitcoin’s 25% rally, Binance had a staking rate of 1.33, which is consistent with the previous week. This indicator peaked at 1.53 on February 10th, but has since returned to 1.31.
On the other hand, Huobi’s top traders had an indicator of 0.74, which remained flat for three days prior to February 8. As BTC rose from $ 44,000 to $ 48,000 on February 11th, these traders started increasing their net long products and the current reached 0.80. Although this level still prefers net short products with 20%, it remains above the 0.75 level as of January 29.
Finally, OKEx’s top investors took 14% net long positions before Tesla news came out. Although they returned to a 47% net short position on the same day, the indicator has returned to 1.03 in the past four days. Currently OKEx traders are well below the 52% net long position two weeks ago.
Staking can be an opportunity to catch the best investors
The best traders could take their BTC off the exchange in search of better return opportunities. Therefore, assuming that they only enter short positions by watching central exchanges can be a difficult conclusion to achieve.
As is currently the case, the long-short indicator does not show the overly clear long positions of arbitrage tables, market makers and whales. A balanced derivatives market indicates that there is plenty of room for buying activity if BTC continues to rise to $ 50,000 and above.