Spot ETF Approval and Bitcoin's Price Surge
Bitcoin (BTC) has seen a significant 15.7% price increase in the first six days of December. The surge can be attributed to the anticipation of the 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 Jan. 10.
Multiple Rejections Cast Doubt
Despite the recent price surge, analysts have failed to consider the multiple rejections at $37,500 and $38,500 in November. These rejections have left professional traders questioning the market's strength, especially in terms of derivatives metrics.
Volatility Affects Pro Traders' Appetite
The inherent volatility of Bitcoin has led professional traders to reduce their appetite for leveraged long positions. Even during bullish markets, corrections are natural, but they have resulted in significant losses for leveraged long buyers in the past five days, totaling $390 million.
Consolidation of Positions Provides Insights
By analyzing positions across perpetual and quarterly futures contracts, a clearer picture emerges of professional traders' stance. While OKX's top traders have shifted to favoring shorts, Binance's top traders have shown an increase in long positions.
Options Data Reveals Mixed Sentiment
Options data from OKX indicates an increasing demand for put options, suggesting that some whales and market makers may not have anticipated the price rally. However, the overall volume of call options indicates that traders were not betting on a price decline.
Implications for the Future
As Bitcoin's price remains above $42,000 in anticipation of a potential spot ETF approval, the pressure on those whales who did not participate in the recent rally may increase. The market is poised for further developments as the approval deadline approaches.
Please note that this article is for general information purposes only and should not be taken as legal or investment advice.
