Metrics Show The Bullish Sentiment in the Bitcoin Market

Each time Bitcoin breaks through a price, investors expect a certain kind of correction. In spite of failing to hit the resistance level of $24,000, its price dropped below $22,000 on December 21. This may encourage buyers that they still have the opportunity to buy the dip.

However, over the past week, Bitcoin’s predominance in the market continues to expand, from 64.3% to 67.3%. This partly comes that deVere Group — the Dubai-based financial consultant firms — expected Bitcoin will reach $46,000 per coin. Additionally, Bitcoin’s future contract of Chicago Commodity Exchange (CME) has exceeded $1.3 billion, which becomes a definite certification that an increasing number of institutions have gotten involved.

Throughout the past week, Bitcoin has outperformed most of the other altcoins in a 7-day price change. Moreover, in light of trading volume, Bitcoin also gets the upper hand among all altcoins besides Tether (USDT). This metric also reinforces Bitcoin’s predominance in the crypto market.

Perpetual futures fees keep stable

Perpetual futures charge fees every 8 hours, which also eliminates the price gap in transactions. Despite open interests keeping consistent, there is a great difference in the leverage ratio.

With the higher leverage ratio of contract buyers, the fees are positive and buyers need to pay for the fee. This is generally taken place in bull run owing to the more needs of bulls.

If weekly fees keep above 2%, investors’ sentiment will be extremely optimistic. With price surging, this level of fees is acceptable, while it may incur a couple of problems when Bitcoin trades sideways or drops.

As per the above chart, as Bitcoin dropped, buyers will possibly increase their holding of perpetual futures, additionally, although Bitcoin price fell on December 21, the weekly funding rates were not down below zero. This indicates bulls and bears experience the same leverage ratio.

Each time Bitcoin breaks through a price, investors expect a certain kind of correction. In spite of failing to hit the resistance level of $24,000, its price dropped below $22,000 on December 21. This may encourage buyers that they still have the opportunity to buy the dip.

However, over the past week, Bitcoin’s predominance in the market continues to expand, from 64.3% to 67.3%. This partly comes that deVere Group — the Dubai-based financial consultant firms — expected Bitcoin will reach $46,000 per coin. Additionally, Bitcoin’s future contract of Chicago Commodity Exchange (CME) has exceeded $1.3 billion, which becomes a definite certification that an increasing number of institutions have gotten involved.

Hot discussion in social media

Data from TheTie shows owing to the recent surge of Bitcoin price, tweets relating to “Bitcoin” hit an all-time high since December 2017. Although the activity indicators dropped slightly, its current leverage is higher than 10% of last month.

Despite the large-scale increase of activity on Twitter, this does not exactly represent that more retails are buying Bitcoin, but as the price increases, it may attract increasing attention.

Open interest put/cut ratio

In order to measure the sentiment in the whole market, the best way is to compare the number of open interest buying. In general, buying open interest shows the bullish sentiment of investors, reversely selling means bearish.

As Bitcoin breaks through $20,000, investors are sinking a correction for protection, which resulted in that the BTC put/cut ratio hit the peak of 1.08 on December 19. That is to say, this does not lay any impact on the optimistic sentiment.

Generally speaking, the aforementioned metrics serve as a positive signal, also indicate the soon recovery of investors’ confidence.

Twitter: ICoinTime

Facebook: IC ICoinTime

Originally published at https://en.icointime.com on December 24, 2020.

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