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Traders Remain Extremely Bullish on Prices of Bitcoin and Ethereum

The Ethereum price is now the centre of attention. However, the options data shows that professional traders remain incredibly bullish on the price of Bitcoin.

In recent days, the price of Bitcoin (BTC) has underperformed Ether (ETH) by almost 20%. Although BTC appears to be struggling to break the $18,800 barrier, both cryptocurrencies show the same uptrend based on data from derivatives markets.

Ether is entering a parabolic rally. The optimism about the launch of its Eth2 network is reflected in the options markets. Despite the lack of similar price action from BTC, Bitcoin traders do not appear to be concerned. The data shows that they are still extremely bullish.

Analyzing the base indicator is a beneficial thing, as it compares the level of the futures contracts with the current price on the spot exchanges.

Healthy markets usually have an annualized base of 5% to 10%. Typically, this situation is known as contango. On the other hand, trading futures contracts at a discount usually occur during strongly bearish markets.

The basis of the Ether futures have wavered between 10% and 20%. Therefore, we can assume that there are bullish expectations. Rather than leaving their Ether holdings on a derivatives exchange, the seller preferred to use them for a stake. Therefore, it is natural to demand a premium for the operation.

The BTC futures premium has performed similarly, despite today’s negative performance. If traders had given up expectations of a continued bull run, this indicator would have dipped below 10% annualized.

There is only one reason for a trader to pay such an expensive premium on a futures contract, and that reason is bullishness. This indicator can be interpreted as a tax to maintain leveraged long positions.

No interest from options traders to open bearish positions

The 25% slope of the delta also provides useful information on sentiment and posture for professional traders.

A delta sloping to +25% indicates that put options are more expensive than similar call options, indicating bearish sentiment. On the other hand, if it is inclined to -25%, it suggests an uptrend.

The indicator usually ranges between -20% and +20% in neutral markets, although that has not been the case for Ether in recent weeks.

Options traders are unwilling to sell upside protection. Derivatives investors remain bullish despite the 28% rally of the past seven days.

Analysts expect BTC options traders to be a bit less bullish after today’s negative performance, but that has not been the case.

The data shows that BTC options traders are remarkably bullish, regardless of how severe the past few days have been. Therefore, there is no indication of a change in sentiment coming from the derivatives markets.

Although there are many ways to read the same chart according to technical analysis, BTC has not exactly exuded optimism.

 

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