Bitcoin bears have plenty of reasons to keep their BTC price below $ 32,000

Bitcoin bears have plenty of reasons to keep their BTC price below $ 32,000 – Mail Bonus

Since May 10, Bitcoin (BTC) has shown a relatively narrow range of price movements and the cryptocurrency has failed to break the $ 32,000 resistance many times.

BTC-USD 12 hour price on Coinbase. Source: TradingView

Rough trading partly reflects uncertainty in the stock market, where the S&P 500 index ranged from 3,900 to 4,180 during the same period. On the other hand, there has been economic growth in the euro area, where GDP grew by 5.1% between years. On the other hand, inflation continues to rise, reaching 9% in the UK.

A further addition to the fluctuations of Bitcoins was the proposal for digital property rules, which was presented to the US Senate on June 7. The 69-page bilateral bill is supported by Sen. Cynthia Lummis of Wyoming and Sen. Kirsten Gillibrand of New York and discusses the CFTC’s authority over the relevant digital asset market.

On June 3, the Financial Services Authority of South Korea (FSS) launched an inquiry with 157 payment gateway services that work with digital assets. Earlier, on May 24, South Korean officials launched an investigation into Do Kwon, the main character in the Terra incident.

The US Securities and Exchange Commission (SEC) also launched an investigation against Binance Holdings on June 6. Binance is the world’s largest cryptocurrency exchange by volume and the SEC is assessing whether BNB’s initial public offering will violate securities rules.

On June 6, the IRA Financial Trust, a platform that offers self-managed digital assets and pensions, filed a lawsuit against the Gemini cryptocurrency exchange, claiming that the February 8 breach resulted in a $ 36 million loss on cryptocurrencies from Gemini’s customer accounts. custody.

Let’s look at Bitcoin future data to understand how professionals are positioned, including whales and market makers.

Derivatives reflect investors’ bear expectations

Traders should analyze Bitcoin futures market data to understand how professionals are positioned. The quarterly agreements are an ideal tool for experienced traders to avoid the volatile financing ratio of the eternal future.

The basic indicator measures the difference between long-term forward contracts and current market levels. Bitcoin’s annual premiums should be in the range of 5% to 10% to compensate traders for “locking in” the money for two to three months until the contract expires.

Bitcoin 3 months future premium per year. Source: Laevitas

Bitcoin futures have been below 4% since April 12, which is a typical reading for a bearish market. Even more worrying is that the last time these professional traders were bullish was more than six months ago when the benchmark exceeded the 10% threshold.

To exclude external effects specific to the futures instrument, traders must also analyze the Bitcoin options market. The 25% delta error is an illustrative sign of when Bitcoin market makers and arbitration desks are overloaded for upside down or down protection.

In the bullish market, option investors give a higher probability of a price pump, which causes the error indicator to fall below a negative 12%. On the other hand, general panic in the bear market causes a positive 12% or more error.

Bitcoin 30 day options 25% delta error: Source: Laevitas

The 30-day delta deviation has been in the range of 12.5% ​​to 23% between June 1st and 7th, indicating that traders are pricing a higher probability of bearish movement. However, it shows a modest improvement in attitudes from the last two weeks.

Regulations on cryptocurrencies and weak economic figures clearly weigh on investor sentiment and derivatives data show that professional Bitcoin traders avoid indebted long-term positions as well as are reluctant to take risks.

At the moment, it is clear that the Bears are happy to put $ 32,000 as a resistance level and a repeated drop to the $ 28,200 level is likely to continue.

The views and opinions expressed herein are theirs alone author and do not necessarily reflect the views of Cointelegraph. Every investment and business involves risk. You should do your own research when making a decision.