DXY

Bitcoin eyeing ‘next big move’ which could see $19K retest — analyst

It’s decision time for BTC price action in a range that could also see a trip to $28,000, popular trader Skew believes.

Bitcoin (BTC) is headed to either $28,000 or $19,000 and this week could decide all, fresh analysis says.

In Twitter comments on Feb. 15, popular trader, Skew, told followers that BTC/USD is now in a “pivotal area.”

“Next big move” due for Bitcoin

Despite returning above $22,000 on the back of the Feb. 14 United States Consumer Price Index (CPI) print, Bitcoin has yet to resume the blistering rally, which saw it gain 40% in January.

After two weeks of consolidation, however, the time to make a decision is here, Skew believes.

“I think we’re setting up for the next big move,” he summarized alongside a chart showing relevant BTC price targets.

Those targets come in the form of $28,000 and $19,000 to the downside. Both somewhat echo other perspectives from throughout the 2023 recovery, with the area immediately below $20,000 of particular interest.

Current spot price levels, meanwhile, show that Bitcoin is testing a “pivotal area here in a big range,” Skew continued.

“Next couple days will be important,” he added.

Asked whether the odds favor one direction or another, the answer was less appetizing for bulls eager to continue the trip toward $30,000.

A combination of U.S. dollar strength, bond yields and stock market performance has already set up a problematic scenario for risk assets en masse, Skew explained.

“From here & the structure of DXY / JPYUSD, makes sense for USD to rally into friday,” a further post read.

“There is also dislocation between the 2Y & ES; weakness in high beta assets today would confirm a move down in risk assets.”

*BTC/USD annotated chart. Source: Skew/ Twitter*

Trader warns of “parabolic” U.S. dollar move

As Cointelegraph reported, the U.S. Dollar Index (DXY) is on the radar for many market participants this month after seeing its own rebound, potentially breaking a multimonth downtrend definitively.

DXY continued to hold ground reclaimed in its latest push higher on the day at around 103.5, data from TradingView showed.

*U.S. Dollar Index (DXY) 1-day candle chart. Source: TradingView*

For fellow trader and analyst TechDev, there is even cause to consider a “parabolic” return to form for DXY, with all the downside pressure on crypto and risk assets that this would imply.

He referred to the relationship between the dollar and Chinese bond yields.

“Interesting that this liquidity signal just put in a similar double-bottom to DXY’s 2 years ago, before it went parabolic,” he commented on a chart on Feb. 12.

*Macro assets annotated chart. Source: TechDev/ Twitter*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin trader fears a bear market comeback: Watch the US dollar

It’s all about a golden cross, a death cross and the Federal Reserve when it comes to Bitcoin price action in the first half of the week.

Bitcoin (BTC) stayed motionless at the Feb. 6 Wall Street open as analysis showed an “interesting dynamic” in play on BTC price charts.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Bitcoin: Golden cross meets death cross

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it ignored the start of United States equities trading to stay near $22,800.

The pair had seen flash volatility into the weekly close, abandoning levels nearer its six-month highs above $24,000.

Bitcoin thus worried market participants as the week began, with an increasing number eyeing a potential retest of $20,000 or lower.

For on-chain monitoring resource Material Indicators, attention now turned to two classic chart features: a “golden cross” on daily timeframes and a “death cross” on weekly timeframes.

Representing interplay between the 50- and 200-day moving averages, golden and death crosses traditionally indicate upcoming bullish and bearish moves, respectively.

Such is their notoriety that automated trading tools may buy or sell as required should one or both events occur.

“At the moment it occurs, a Golden Cross on the Bitcoin D chart could trigger some buying. Likewise, a pending Death Cross on the W chart will trigger some algotrading bots to sell,” Material Indicators wrote in a tweet on the day.

It also highlighted upcoming comments from Jerome Powell, chair of the U.S. Federal Reserve. Due on Feb. 7, cues over inflation policy present in Powell’s words could easily move markets.

Continuing on the chart crosses, Material Indicators co-founder Keith Alan described them as an “interesting dynamic evolving.”

“Bitcoin is headed for an eminent Golden Cross on the D chart which is short term bullish and could trigger some TA algos to buy. We are also headed for a Death Cross on the W chart which is longer term bearish,” he stated in his own tweet.

*BTC/USD annotated charts with golden and death crosses marked. Source: Keith Alan/Twitter*

Dollar strength rebounding is “bad news” for crypto

On the macro, U.S. stocks were down slightly at the open, with the S&P 500 and Nasdaq Composite Index losing 0.8% and 1.1%, respectively. Asian stocks had also finished the day lower.

The U.S. Dollar Index (DXY), meanwhile, continued its rebound in a move threatening to pressure risk assets further.

The Index traded above 103.6 at the time of writing, its highest since Jan. 9, as analysts began to fear for the health of the crypto rally.

“It appears the dollar is attempting to reclaim its yearly uptrend,” popular trader and analyst Roman summarized.

“This is bad news for crypto & stocks because it will indicate a pullback / continuation of bear market. This week is very important. A reclaim of trend, $SPX loses 4100, & I turn back to macro bearish.”

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Data shows pro Bitcoin traders want to feel bullish, but the rally to $23K wasn’t enough

Bitcoin price has flashed a few bullish signals, but traders are not too keen on adding leverage longs until after the Federal Reserve shows its cards on Feb. 1.

Bitcoin (BTC) price had a mixed reaction on Jan. 25 after the United States reported a 2.9% gross domestic product growth in the fourth quarter, slightly better than expected. Still, the sum of all goods and services commercialized between October and December grew less than 3.2% from the previous quarter.

Another data set limiting investors’ confidence was the likelihood that the U.S. Federal Reserve would not revert its contractive measures anytime soon after U.S. durable goods orders jumped 5.6% in December. The indicator came in much higher than anticipated, so it could potentially mean that interest rates will be increased for a little longer than expected.

Oil prices are also still a focus for investors, with West Texas Intermediate (WTI) approaching its highest level since mid-September, currently trading at $81.50. The underlying reason is the escalation of the Russia-Ukraine conflict after the U.S. and Germany decided on Dec. 25 to send battle tanks to Ukraine.

The United States Dollar Index (DXY), a measure of the dollar’s strength against a basket of top foreign currencies, sustained 102, near its lowest levels in eight months. This signals low confidence in the U.S. Federal Reserve’s ability to curb inflation without causing a significant recession.

Regulatory uncertainty could also have been vital in limiting Bitcoin’s upside. On Jan. 26, De Nederlandsche Bank, the Dutch central Bank, fined cryptocurrency exchange Coinbase $3.6 million due to non-compliance with local regulations for financial service providers.

Let’s look at derivatives metrics to understand better how professional traders are positioned in the current market conditions.

Bitcoin margin longs slightly increase

Margin markets provide insight into how professional traders are positioned because it allows investors to borrow cryptocurrency to leverage their positions.

For example, one can increase exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. Unlike futures contracts, the balance between margin longs and shorts isn’t always matched.

*OKX stablecoin/BTC margin lending ratio. Source: OKX*

The above chart shows that OKX traders’ margin lending ratio slightly increased after Jan. 20, signaling that professional traders added leverage long after Bitcoin broke above the $21,500 resistance.

One might argue that the demand for borrowing stablecoins for bullish positioning is far less than levels seen earlier in January. However, a stablecoin/BTC margin lending ratio above 30 is unusual and typically excessively optimistic.

More importantly, the current metric at 17 favors stablecoin borrowing by a wide margin and it indicates that shorts are not confident about building bearish leveraged positions.

Options traders flirt with an optimistic bias

Traders should also analyze options markets to understand whether the recent rally has caused investors to become more risk-averse. The 25% delta skew is a telling sign whenever arbitrage desks and market makers are overcharging for upside or downside protection.

The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.

In short, the skew metric will move above 10% if traders fear a Bitcoin price crash. On the other hand, generalized excitement reflects a negative 10% skew.

*Bitcoin 60-day options 25% delta skew: Source: Laevitas*

The 25% delta skew flirted with the optimistic bias on Jan. 21 as the indicator reached the threshold at minus 10. The movement coincides with the 11.5% BTC price increase and its subsequent rejection at $23,375. From then on, options traders increased their risk aversion for unexpected price dumps.

Currently, near zero, the delta skew signals investors are pricing similar risks for the downside and the upside. So, from one side, the lack of demand from margin traders willing to short Bitcoin seems promising, but at the same time, options traders were not confident enough to become optimistic.

The longer Bitcoin remains above $22,500, the riskier it becomes for those betting on BTC price decline (shorts). Still, traditional markets continue to play an essential role in setting the trend, so the odds of another price pump ahead of the Fed’s decision on Feb. 1 are slim.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price liquidation risk increases as BTC struggles to reclaim $18K

Leveraged long margin traders are playing with a hot potato, and with BTC struggling at $17,000, they might get burned sooner than later.

Bitcoin (BTC) price had a mixed reaction on Dec. 9 after the November report on United States producer prices showed a 7.4% increase versus 2021. The data suggested that wholesale costs continued to rise and inflation may last longer than investors had previously believed. Oil prices are also still a focus for investors, with crude WTI hitting a new yearly low at $71.10 on Dec. 8.

The United States Dollar Index (DXY), a measure of the dollar’s strength against a basket of top foreign currencies, sustained the 104.50 level, but the index traded at 104.10, a 5-month low on Dec. 4. This signals low confidence in the U.S. Federal Reserve’s ability to curb inflation without causing a significant recession.

Trader gutsareon noted that the choppy activity caused leverage longs and shorts to be liquidated, but it was followed by a failed tentative dump below $17,050.

#BTC

good study case

first late shorts got taken out on the push..then late longs on the flush…then longs again on the PPI number…then shorts again…then a “unusual” low with little to no change in OI

rollercoaster pic.twitter.com/Qju1eOuNMX

— Peter (@gutsareon) December 9, 2022

According to the analysis, the open interest stagnation on futures contracts indicated low confidence from bears.

Regulatory uncertainty could have played a key role in limiting Bitcoin’s upside. On Dec. 8, the United States Securities and Exchange Commission (SEC) issued new guidance that could see publicly traded companies disclose their exposure to crypto assets.

The SEC’s Division of Corporation Finance said that the recent crisis in the crypto asset industry has “caused widespread disruption” and that U.S. companies might have disclosure obligations under federal securities laws to disclose whether these events could impact their business.

Let’s look at derivatives metrics to understand better how professional traders are positioned in the current market conditions.

Bitcoin margin longs faced a drastic increase

Margin markets provide insight into how professional traders are positioned because it allows investors to borrow cryptocurrency to leverage their positions.

The above chart shows that OKX traders’ margin lending ratio increased from Dec. 4 to Dec. 9, signaling that professional traders increased their leverage longs even after multiple failed attempts to break above the $17,300 resistance.

Currently at 35, the metric favors stablecoin borrowing by a wide margin and indicates that shorts are not confident about building bearish leveraged positions.

Option traders remain risk-averse

Traders should analyze options markets to understand whether Bitcoin will eventually succumb to the bearish newsflow. The 25% delta skew is a telling sign whenever arbitrage desks and market makers are overcharging for upside or downside protection.

The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.

In short, the skew metric will move above 10% if traders fear a Bitcoin price crash. On the other hand, generalized excitement reflects a negative 10% skew.

As displayed above, the 25% delta skew improved between Dec. 4 and Dec. 9, shows options traders reduced their risk aversion for unexpected price dumps. However, at the current 15%, the delta skew signals that investors remain fearful because market makers are less included in offering downside protection.

From one side, the lack of open interest increase as Bitcoin tested the intraday low on Dec. 9 seems encouraging. Still, excessive use of margin indicates that buyers might be forced to reduce their positions during surprise downside moves.

The longer it takes for Bitcoin to recapture $18,000, the riskier it becomes for leverage margin longs. Traditional markets continue to play an essential role in setting the trend, so a potential retest down to $16,000 cannot be ruled out.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

BTC price tests $17K on PPI as Bitcoin analysts eye CPI, FOMC catalysts

Bitcoin begins to deal with fresh U.S. macro cues as BTC price steadily holds $17,000 support.

Bitcoin (BTC) fell on the Dec. 9 Wall Street open as United States economic data appeared to disappoint markets.

Attention turns to Bitcoin vs. CPI “big trigger”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping to come closer to $17,000 after passing the level overnight.

The pair reacted badly to U.S. Producer Price Index (PPI) data, which despite being above expectations, still beat the readout from the month prior.

“Bit of an over reaction towards PPI, which has been dropping significantly from last month, but less than expected,” Michaël van de Poppe, founder and CEO of trading firm Eight, responded.

Van de Poppe, like others, noted that the crux of macro cues would come next week in the form of Consumer Price Index (CPI) print for November.

“CPI next week is the big trigger, just like it was earlier this month,” he added.

CPI could be a seminal point, trading firm QCP Capital continued, as if it were to continue its downward trend, markets may get an even stronger conviction over lower inflation greeting the new year.

The Federal Reserve’s Federal Open Market Committee (FOMC) meeting days later, where policymakers decide on interest rate hikes, should add fuel to the fire.

“Tuesday’s CPI will yet again be ‘the most important CPI release ever,’ this time because the market has set it up to be with its epic 2-month short squeeze rally,” QCP wrote in a market update on the day:

“At the FOMC, Fed members will release their updated projections of inflation and interest rates. Markets will focus on where they forecast inflation next year, as well as where they see rates in 2023 and 2024. Both these events are the last remaining hurdles for the rally into year-end.”

Analysts acknowledged that if CPI were to disappoint, it would potentially “invalidate” the stocks’ rally so far. A 50-basis-point rate hike had a 77% probability of occurring, according to CME Group’s FedWatch Tool.

*Fed target rate probabilities chart. Source: CME Group*

U.S. dollar catches a break

U.S. equities were flat after the first hour’s trading, with PPI failing to make a significant dent in performance.

For macroeconomist and stocks analyst James Choi, this was to be expected, given that the Fed was already considering decreasing the pace of its rate hikes.

“The FED already pivoted its course. Today’s PPI won’t make a dent to Powell’s plan. It’s 50bp next week, then that’s it,” he forecasted, also saying that his calculations predicted a “much, much lower” CPI reading than many believed.

Meanwhile, the U.S. dollar strength also simmered, the U.S. Dollar Index (DXY) attempting to make up for the previous day’s lost ground on the back of PPI.

*U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

BTC price levels to watch as Bitcoin holds $17K into the market open

BTC price strength allows cautious Bitcoin traders outline targets above $17,500.

Bitcoin (BTC) cooled volatility above $17,000 into the Dec. 5 Wall Street open as traders confirmed upside targets.

Bitcoin traders warm to near-term upside

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it held overnight gains, having hit three-week highs.

The weekly close itself was encouraging for some, forming Bitcoin’s highest since the FTX scandal broke.

Now, traders were hoping that upside would continue toward $20,000, with various resistance zones in play.

“Slowly, but surely, Bitcoin is grinding upwards. Needs to crack $17.4-17.6K, but then we most likely continue quite fastly towards $19K,” Michaël van de Poppe, founder and CEO of trading firm Eight, wrote in an update on the day.

A further post offered a BTC/USD chart with relevant price levels of interest.

*BTC/USD annotated chart. Source: Michaël van de Poppe/ Twitter*

Fellow trader Titan of Crypto flagged $18,500 as a formidable resistance zone to watch, while a daily close above $17,167 would be “encouraging.”

“Are we leaving the range this week?” trader DoopieCash queried alongside a chart showing $17,552 as clinch level on daily timeframes.

*BTC/USD annotated chart. Source: DoopieCash/ Twitter*

A still-optimistic Moustache meanwhile pointed to a classic bottoming pattern, the inverse head and shoulders, “in full swing” on the 12-hour chart.

*BTC/USD annotated chart. Source: Moustache/ Twitter*

Dollar strength faces tense week

Eyes were meanwhile on United States equities as Asian markets had another strong day’s trading.

Hong Kong’s Hang Seng was up 4.5% on the day, while the Shanghai Composite Index managed nearly 1.8%.

The U.S. dollar remained a focus within the macro picture, with the U.S. dollar index (DXY) near five-month lows in what could yet be a boon for Bitcoin.

Sven Henrich, founder of NorthmanTrader, meanwhile noted the ongoing inverse correlation between DXY and the S&P 500.

“A key chart to navigating markets in past few months: The US dollar $SPX directional correlation. Still sitting at 95%,” part of Twitter comments mentioned on the day.

*U.S. dollar index (DXY) vs. S&P 500 annotated chart. Source: Sven Henrich/ Twitter*

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

BTC price levels to watch as Bitcoin holds $17K into the Wall Street open

BTC price strength allows cautious traders to outline targets above $17,500.

Bitcoin (BTC) volatility cooled above $17,000 into the Dec. 5 Wall Street open as traders confirmed upside targets.

Bitcoin traders warm to near-term upside

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it held overnight gains, having hit three-week highs.

The weekly close was encouraging for some, forming Bitcoin’s highest since the FTX scandal broke.

Now, traders are hoping that upside will continue toward $20,000, with various resistance zones in play.

A further post offered a BTC/USD chart with relevant price levels of interest.

Fellow trader Titan of Crypto flagged $18,500 as a formidable resistance zone to watch, while a daily close above $17,167 would be “encouraging.”

“Are we leaving the range this week?” trader DoopieCash queried alongside a chart showing $17,552 as clinch level on daily timeframes.

A still-optimistic trader who tweets under the alias “Moustache” meanwhile pointed to a classic bottoming pattern — the inverse head and shoulders — “in full swing” on the 12-hour chart.

Dollar strength faces tense week

Eyes were meanwhile on United States equities after Asian markets had another strong day’s trading.

Hong Kong’s Hang Seng was up 4.5% on the day, while the Shanghai Composite Index managed a nearly 1.8% gain.

The U.S. dollar remained a focus within the macro picture, with the U.S. Dollar Index (DXY) near five-month lows in what could yet be a boon for Bitcoin.

Sven Henrich, founder of NorthmanTrader, meanwhile noted the ongoing inverse correlation between DXY and the S&P 500.

“A key chart to navigating markets in past few months: The US dollar $SPX directional correlation. Still sitting at 95%,” he tweeted.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin analysts eye weakening US dollar as BTC price fights for $17K

BTC price action stays cool over the weekend as Bitcoin bulls attempt to flip $17,000 to support.

Bitcoin (BTC) bulls attempted to retake $17,000 into the Dec. 4 weekly close as volatility looked set to return to the market.

Bollinger Bands demand BTC pricevolatility

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD crisscrossing the $17,000 mark — a focal point throughout the weekend.

With macro cues still to come, Bitcoin looked for catalysts as signs of volatility crept into low timeframes.

Among those eyeing a potential break of the status quo was popular trader Cheds, who noted that the Bollinger Bands volatility indicator was flashing on the 4-hour chart.

Bollinger Bands constricting signals that volatility is due soon, and on the day, 4-hour chart bands were at their narrowest since Nov. 27 — just before BTC/USD gained $1,000.

*BTC/USD 4-hour candle chart (Bitstamp) with Bollinger Bands. Source: TradingView*

Fellow trader Crypto Tony meanwhile stayed put on his short-term BTC price theory.

“Simply no change over the last few days,” he told Twitter followers:

“We are grinding more into the EQ / mid range, but i wouldn’t be surprised to see a wick up to form an SFP and back down.”

*BTC/USD annotated chart. Source: Crypto Tony/ Twitter*

Previously, Crypto Tony flagged $21,500 as a target to aim for if the bulls were to take control and change the trend.

U.S. dollar index reverses relief bounce

The coming week meanwhile looked increasingly important for the U.S. dollar and, by extension, risk asset performance.

Already at its lowest levels in five months, the U.S. dollar index (DXY) looked decidedly bleak at the end of the prior week’s trading.

A bounce to 105.6 on Dec. 2 reversed almost entirely through the day, DXY finishing on 104.5.

For technical analyst Gert van Lagen, it was all part of the plan, with bearish DXY signals apparent even in November.

“Swift bearish continuation would be normal here,” he wrote in an analysis on Nov. 23 to which he returned over the weekend.

“Correction ongoing,” trading resource Stockmoney Lizards added about DXY performance.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

DXY bounces at major support, reducing Bitcoin’s chance at breaking the $17.2K resistance

The dollar index (DXY) found support at a key level, leading traders to question whether BTC will manage to flip $17,250 to support.

On Dec. 2, the United States dollar index (DXY), an index that measures the dollar’s strength against a basket of top foreign currencies, reached 104.40, which was the lowest level seen in five months.

To recap, the U.S. dollar’s weight against the basket of top foreign currencies grew by 19.6% in 2022 until late September as investors looked for protection against the impact of a hawkish Federal Reserve and, more recently, the rising energy costs and the effect of high inflation.

The U.S. dollar’s retreat may have been an interim correction to neutralize its “overbought” condition, as the 114.60 peak was the highest level in 20 years. Still, its inverse correlation with Bitcoin (BTC) remains strong, as pointed out by analyst Thecryer on Twitter:

$DXY $BTC pic.twitter.com/jG9HmYN8Mg

— Thecryer (@HumpBackCrypto) December 2, 2022

Notice how the intraday DXY retrace to 105.50 from the 104.40 low happened when Bitcoin faced a $230 flash crash to $16,790. Such movements reinforce how cryptocurrencies’ performance remains codependent on traditional markets.

Bitcoin enthusiast Aldo the Apache noticed that the DXY “bullish divergence at support” occurred as the S&P 500 stock market index struggled with a vital resistance level.

$DXY with bullish divergence at support while $SPX is coming is at major resistence.

What does this mean for $BTC? Another leg down IMO. pic.twitter.com/PK3Ku0zZrl

— Aldo the Apache (@AldotheApache77) December 2, 2022

According to the analyst, the net impact for Bitcoin is negative if the expected trajectory confirms with the U.S. dollar gaining strength against major fiat currencies, and the stock market faces another leg down.

On-chain metrics are also painting a potentially bearish picture as Bitcoin miners, feared to be entering a new wave of capitulation, have upped sales of BTC reserves. For instance, the record hash rate and increased energy costs have drastically severed miners’ profitability.

Glassnode’s miner outflow multiple, which measures BTC outflows from miner wallets relative to their one-year moving average, is now at its highest in six months.

Let’s look at derivatives metrics to understand better how professional traders are positioned in the current market conditions.

Bitcoin margin longs see a drastic reduction

Margin markets provide insight into how professional traders are positioned because it allows investors to borrow cryptocurrency to leverage their positions.

For instance, one can increase exposure by borrowing stablecoins to buy Bitcoin. On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. Unlike futures contracts, the balance between margin longs and shorts isn’t always matched.

The above chart shows that OKX traders’ margin lending ratio firmly declined from Nov. 27 to Nov. 30, signaling that professional traders decreased their leverage longs during the dip toward $16,000.

More importantly, the subsequent $1,250 gain that led Bitcoin to $17,250 on Nov. 30 was not enough to instill confidence in Bitcoin buyers using stablecoin borrowing. Still, presently at 23, the metric favors stablecoin borrowing by a wide margin — indicating shorts are not confident about building bearish leveraged positions.

Option traders remain risk-averse

Traders should analyze options markets to understand whether Bitcoin will successfully break the $17,250 resistance. The 25% delta skew is a telling sign whenever arbitrage desks and market makers are overcharging for upside or downside protection.

The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.

In a nutshell, the skew metric will move above 10% if traders fear a Bitcoin price crash. On the other hand, generalized excitement reflects a negative 10% skew.

As displayed above, the 25% delta skew declined between Nov. 21 and Nov. 30, indicating options traders reduced their bets of unexpected price dumps. However, the trend inverted on Dec. 1 after the $17,250 resistance proved stronger than expected.

Currently, at 18%, the delta skew signals that investors are still fearful and it reflects a lack of interest from whales and market makers in offering downside protection.

Consequently, pro traders are not confident that Bitcoin will recapture $18,000 anytime soon, which can be explained by the high correlation with traditional markets.

Until the DXY index sets a more precise direction and the S&P 500 shows strength at 4,000, the trend favors Bitcoin bears.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin heads to US midterms as research says dollar ‘closing in’ on a market top

Weekend losses solidify as macro volatility to come meets internal turmoil over FTX.

Bitcoin (BTC) stayed lower at the Nov. 7 Wall Street open as the day before the United States midterm elections opened to flat equities performance.

Crypto wobbles on FTX woes

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD nearing $20,600 at the time of writing — a three-day low.

Volatility was expected around the midterms and the Consumer Price Index (CPI) print for October later in the week.

An additional hurdle in the form of controversy over trading platform FTX added to the market’s cold feet, with commentators wary of unnecessary damage to growth.

“This whole thing is incredibly bad for the industry, and especially for retail,” popular trader and analyst Pentoshi summarized.

“Retail is the one who pays for it when war is waged. But it can also end up with unintended consequences. Unfortunate to see.”

Bitcoin had headed south overnight amid comments from Changpeng Zhao, CEO of the largest global exchange Binance, in which he confirmed that the exchange would be ridding itself of FTX’s in-house cryptocurrency, FTX Token (FTT).

William Clemente, co-founder of crypto research firm Reflexivity, offered a silver lining in the form of increased value for decentralized exchanges (DEXs) going forward.

“Similar to how the mismanagement of risk from centralized crypto lenders earlier this year laid out the bullish case for DeFi, this centralized exchange drama is also laying out the bullish case for DEXs,” he tweeted, referring to the Terra debacle and associated repercussions.

A look at the top 10 cryptocurrencies by market capitalizati showed mixed performance on the day, with 24-hour losses heaviest for Solana (SOL), down 12.4%.

Back on Bitcoin, trader Il Capo of Crypto stayed close to an existing theory of $21,500 marking a local top to come, which would be followed by more severe downside.

“21500 and nuke. Do it,” he wrote on the day.

That theory included a target macro low of $14,000, in stark contrast to other forecasts, which called for $30,000 within weeks.

Analyst: DXY “key to everything”

Both the S&P 500 and Nasdaq Composite Index were meanwhile unmoved ahead of the midterms.

The U.S. dollar index (DXY), busy attempting a reprieve from last week’s losses, circled 110.5 at the time of writing, unable to find bullish momentum.

Precising research into macro markets, Raoul Pal, founder and CEO of Global Macro Investor, called dollar weakness “the key to everything right now.”

“We’re not totally convinced that we can’t make a final push higher towards 117 but we’re closing in on a top,” the research piece added.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.