Bitcoin (BTC) has been trading within a narrow 7% range since Nov. 12, signaling a period of consolidation around $91,000. While this might indicate a pause in the bull market, derivatives suggest that professional traders remain confident in the current momentum.
The Role of MicroStrategy in Bitcoin’s Surge
Multiple attempts to break above the $92,000 level have been made, indicating strong buying demand beyond MicroStrategy’s multiple BTC acquisitions. The company has become a significant player in the cryptocurrency market, with over $29 billion invested in Bitcoin. However, it is essential to analyze whether MicroStrategy is the sole driver behind the bull run.
Analyzing Derivatives and Margin Markets
The Bitcoin 30-day options 25% skew (put-call) at Deribit has dropped to its lowest level in four months, indicating that the market is pricing a discount for put (sell) options. Levels below -6% suggest bullish sentiment and reflect confidence in the $87,000 support level, particularly from whales and arbitrage desks.
Bitcoin Options Delta Skew
- Lowest Level in Four Months: The BTC options delta skew has dropped to its lowest level in four months.
- Bullish Sentiment: Levels below -6% suggest bullish sentiment.
- Confidence in Support Level: Confidence in the $87,000 support level is particularly evident from whales and arbitrage desks.
BTC Futures and Margin Markets
While the data suggests optimism, it does not guarantee that investors are confident the bull market will continue. It is crucial to analyze the factors driving recent momentum.
Is MicroStrategy the Sole Driver Behind Bitcoin’s Bull Run?
The speculation that a few entities are responsible for the buying activity above $87,000 gained traction after MicroStrategy revealed an additional purchase of 51,780 BTC on Nov. 18. According to an SEC filing, the company now holds over $29 billion in Bitcoin and is actively pursuing a plan to raise $21 billion through the issuance and sale of company shares.
The Impact of Spot ETFs
Investors believe that Bitcoin has a greater chance of continued price appreciation if spot BTC exchange-traded fund (ETF) net inflows show signs of early adoption, including increased exposure from pension funds and large hedge fund managers. However, the latest data from Nov. 14 and 15 revealed $771 million in net ETF outflows as investors decided to take profits following the recent rally.
Bitcoin Futures Premium
The Bitcoin two-month futures premium (basis rate) surged to 17% on Nov. 18, far exceeding the 5%–10% neutral threshold. This level of optimism was last observed almost eight months ago in late March when Bitcoin successfully defended the $64,000 level after two weeks of downward pressure.
BTC Margin Markets
It is essential to analyze BTC margin markets to further assess traders’ sentiment. Unlike derivatives contracts, which always require a buyer and a seller, margin markets allow traders to borrow stablecoins to buy spot Bitcoin. Similarly, bearish traders can borrow BTC to create short positions, betting on a price decline.
Bitcoin Margin Long-to-Short Ratio at OKX
- The current Bitcoin long-to-short margin ratio at OKX is 14 times in favor of longs (buyers).
- Historically, periods of excessive confidence have driven the indicator above 40 times.
- Levels below 5 times favoring longs are generally considered bearish.
Conclusion
Bitcoin derivatives and margin markets signal strong bullish momentum, regardless of the concentration of buy-side activity driven by MicroStrategy. The lack of a significant impact from the retest of the $88,700 level on Nov. 17 further suggests that investors are not ready to exit at the first negative price swing.
Subscribe to Our Newsletter
Get critical insights to spot investment opportunities, mitigate risks, and refine your trading strategies. Delivered every Monday.
By subscribing, you agree to our Terms of Service and Privacy Policy.
This article is for general information purposes only and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
