Professional traders are racking up the current Bitcoin price drop. While retail investors are busy trading altcoins.
In effect, Bitcoin has struggled to hold at $ 55,000 for the past 16 days. Also, the rejection that took place after the all-time high of $ 64,900 had a crushing impact on sentiment among retail traders.
However, despite Bitcoin’s recent underperformance and current drop of 6.5%, professional traders have been buying the dip for 24 hours.
These whales and the movements of the arbitration table are reflected in the long / short ratio of OKEx futures. As well as the Bitfinex margin loan markets.
When this purchase occurs, retail traders are mostly calm, which is reflected in the neutral perpetual funding rate.
As the chart shows, the 8-hour perpetual futures funding rate has been below 0.05% for the past two weeks.
For month-end contracts, prices differ significantly from regular spot exchanges, reflecting the imbalance of long and short leverage. This discrepancy is the reason why retail traders tend to prefer perpetual futures.
Professional traders buy falling Bitcoin price
On the other hand, the long / short indicator for professional traders reached its highest level in 30 days, indicating whale buying activity and arbitrage tables.
In fact, this indicator is calculated by analyzing the client’s consolidated position in spot, perpetual and futures contracts. As a result, it offers a clearer view of the upward or downward trend of professional traders.
Specifically, the current bid / ask ratio of OKEx futures contracts currently favors long positions by 94%. This buying activity was launched in the early hours of May 4, when Bitcoin fell below $ 55,000.
However, to confirm whether this movement is widespread, margin markets should also be assessed.
Ultimately, there is no question that professional traders are super bullish despite Bitcoin’s current decline. For their part, when it comes to a lack of appetite from retail traders, they currently seem to be focusing on altcoins.
Very important, this article is informative in origin and does not represent any investment recommendation. Always do your own research.
I close with this phrase by David Grider: «We are facing a cooling period, before resuming the rises».