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Bitcoin (BTC) turned bearish on Aug. 15, posting a 5% loss after testing the $25,000 resistance. The move will liquidate more than $150 million in leveraged long positions, with some traders predicting a return to his yearly lows in the $18,000 range.
The price move coincided with worsening conditions for tech stocks, including Chinese giant Tencent, which is expected to record its first-ever quarterly earnings decline. The Chinese gaming and social media conglomerate is expected to post quarterly revenue of about $19.5 billion, down 4% from a year earlier, analysts said.
Furthermore, Citi Investment Bank sharply cut its sell recommendation for Zoom Video Communications (ZM) on Aug. 16, adding that the stock is “high risk”.Analyst explained Challenging post-COVID dynamics, plus additional competition from Microsoft Teams, could see ZM’s share drop by 20%.
Overall bearish sentiment continues to haunt crypto investors. Influencer and trader @ChrisBTCbull said the trader set his target below $17,000 by simply rejecting $25,000.
rear #bitcoin The price did not exceed $25000. All CTs started writing about $16,000 to $17,000 again.
I think it’s time to open up#transaction
Chris (@ChrisBTCbull) August 16, 2022
Monitoring the margin and options markets gives great insight into how professional traders are positioned. For example, if whales and market makers reduce their exposure as BTC approaches the $25,000 resistance, a negative reading will occur.
Margin trading allows investors to borrow cryptocurrencies to leverage their trading positions and increase their earnings. For example, you can increase your exposure by borrowing stablecoins to buy additional Bitcoin positions.
Bitcoin borrowers, on the other hand, can only short the cryptocurrency as they are betting that the price will fall. Unlike futures contracts, the balance between long and short margins is not always the same.
The chart above shows that OKX traders’ margin lending ratio remained relatively stable around 14, while Bitcoin’s price rose 6.3% over the two-day period, after hitting the $25,200 resistance. was denied.
Additionally, the indicators continue to be bullish with significant support for stablecoin borrowing. As a result, the professional trader remains in a bullish position, and no bearish margin trading occurred as Bitcoin returned to his 5.5% on Aug. 16.
Related: Bitcoin Miners See 27% Decline in BTC Holdings After Massive 3-Month Sale
While there is uncertainty as to whether Bitcoin will move toward the $25,000 resistance again, a 25% delta skew has arbitrage desks and market makers overcharging for upside or downside protection. Always a clear sign.
This indicator compares similar call (buy) and put (sell) options and is positive when fear is prevalent as the premium for protective put options is higher than for risky call options.
The skew indicator exceeds 10% when traders fear a crash in the Bitcoin price. On the other hand, generalized excitement reflects a negative 10% bias.
As you can see above, the 25% delta skew has barely moved since August 11th, fluctuating between 5% and 7% most of the time. This range is considered neutral as option traders estimate similar risks of unexpected upside and downside.
If a professional trader had entered the “Fear” sentiment, this indicator would have exceeded 10%.
Despite Neutral Bitcoin Options Indicators, OKX Margin Lending Rate Shows Whales and Market Makers Remain Bullish After BTC Price Drops 5.5% on Aug. 16 . Global macroeconomic conditions improve.
The views and opinions expressed herein are solely author They do not necessarily reflect the views of Cointelegraph. All investment and trading movements involve risk. You should do your own research when making a decision.
