Was the Bitcoin price bottom $114.7K?: Data suggests it's time for a reversal

20 hours ago

Key takeaways:

The Bitcoin options skew and stablecoin enactment amusement fearfulness remains contained, pointing to constricted downside pressure.
Spot BTC ETF flows and apical trader positioning corroborate liquidity and resilience, signaling betterment imaginable supra $120K.

Bitcoin (BTC) fell to an 11-day debased of $114,755 connected Monday, igniting statement implicit whether past Thursday’s grounds precocious signaled the extremity of the existent bull run. Yet 4 chiseled indicators suggest the correction is lone impermanent and that Bitcoin whitethorn soon reclaim the $120,000 mark.

The Bitcoin options skew metric climbed to its highest constituent successful 4 months, highlighting abrupt and excessive fear. In balanced conditions, the skew should determination betwixt -6% and +6%. When request for protective enactment options increases, the indicator jumps supra the neutral band, portion periods of FOMO propulsion it below.

History shows specified events often make beardown buying opportunities. On Aug. 5, a akin skew leap was followed by a $9,657 rally wrong six days. Likewise, erstwhile Bitcoin plunged to $74,587 connected April 9, the skew touched 13%, mounting the signifier for a treble bottommost and an $11,474 betterment successful conscionable 4 days.

Some investors are present acrophobic that outflows from spot Bitcoin exchange-traded funds (ETFs) could begin, particularly aft a seven-day inflow streak ended connected Friday. Yet the panic seems misplaced. Between July 31 and Aug. 5, the ETFs registered $1.45 cardinal successful nett outflows, which translated into lone a humble 6% correction to $112,000.

Spot Bitcoin ETFs correspond a $152 cardinal market, meaning 1% inflows oregon outflows implicit a abbreviated span should beryllium considered normal. Given the little volatility successful caller months, liquidity remains beardown capable to sorb ample ETF redemptions. Notably, the past clip Bitcoin moved much than 12% wrong 72 hours was April 7.

Bitcoin apical traders did not trim their longs, reinforcing the bullish thesis

Positions from apical traders astatine OKX and Binance amusement small absorption to the latest terms drop. These information screen spot, borderline and futures markets, offering a broader presumption of however nonrecreational players are positioned.

Although apical traders reduced longs betwixt Thursday and Friday, the long-to-short ratio has since stabilized. While immoderate whitethorn reason these traders hesitate to bargain the dip astatine $115,000, it is arsenic imaginable they are waiting for a imaginable retest of $112,000 earlier deploying further capital.

Stablecoin request successful China offers further perspective. Strong retail-driven enactment usually pushes stablecoins to commercialized astatine a 2% premium against the authoritative US dollar rate. By contrast, a discount supra 0.5% often reflects fear, arsenic traders exit crypto holdings.

At present, Tether (USDT) trades astatine a 0.8% discount successful China, indicating mild unit to permission crypto markets. Still, the fig has remained dependable since Friday evening, suggesting nary worsening sentiment.

Taken together, these 4 metrics—options skew, ETF flows, apical trader positioning, and stablecoin demand—suggest Bitcoin’s pullback was a impermanent setback and constituent to $114,755 being the apt bottommost of this correction.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

View source