Bitcoin struggles at an all-time high: When will the 20,000 US dollar mark fall?
Yesterday Bitcoin (BTC) reached a new all-time high on some stock exchanges. Although the important $20,000 mark has not yet been broken, some indicators paint a bullish picture – when will the $20,000 mark fall?
The Bitcoin price rose by more than five percent in the last 24 hours, but has not yet been able to fight its way sustainably above its all-time high. Seen over the month, digital Crypto Legacy gold could even increase by more than 40 percent. Currently, BTC is trading just a few hundred US dollars below its all-time high and it seems only a matter of time before the next price jump begins.
At the time of going to press, the Bitcoin exchange rate was 19,710 US dollars.
Institutions extremely active in the Bitcoin market
Most investors dealing with Bitcoin have certainly often heard about the growing influence of the futures and options markets. Large investors in particular trade in such derivatives, as these financial instruments are extremely complex and small investors usually have neither the knowledge nor the opportunities to trade in them. According to crypto analyst Ki Young Ju, large investors are still very active in the Bitcoin market.
Institutional buyers are active in the $BTC market.
Fund flow ratio for all exchanges says only 6% of the network transactions are used for exchange deposits/withdrawals.
It happened in Feb 2019 as well when major exchanges launched OTC desks.
Chart 👉 https://t.co/GKUgWbLbN1 https://t.co/GKUgWbLbN1 pic.twitter.com/5z2eiux3w8
– Ki Young Ju 주기영 (@ki_young_ju) December 1, 2020
Due to the increasing importance of institutions for the Bitcoin share price, we take a closer look at some indicators used by institutional investors.
The Bitcoin Futures market is optimistic
The so-called futures premium indicator measures how expensive futures contracts are compared to normal spot exchange prices. Such futures contracts with a fixed expiration date tend to be traded at a slight premium, the so-called futures premium. This means that the prices on futures exchanges are usually slightly higher than the prices on normal exchanges. The futures premium is an indicator of investor sentiment and currently stands at 1.1%, although the Bitcoin price fell by more than 14% last week. The premium in the futures markets is remarkable. It shows that institutional investors continue to be extremely optimistic about the future performance of the crypto lead currency.
In addition, the trading volume on the futures exchanges has risen continuously in recent weeks. This may also indicate that major investors are still interested in digital gold.
The institutional thirst for Bitcoin does not yet seem to have been quenched and the futures markets suggest further price increases.
Sentiment on the options market does not stand in the way of the all-time high
The options put-call ratio measures whether more investors bet on falling or rising prices. The put-call ratio indicator can therefore be used to assess the mood of market participants. A put-call ratio of 0.64 indicates that significantly more investors are currently betting on rising prices. It is therefore a bullish signal for Bitcoin.
Skew.com: Options Put-Call Ratio
In situations such as those currently seen in the market, it is normal for investors to hedge against falling prices. The put-call ratio is therefore well below its six-month average of 0.9. Nevertheless, a current level of 0.64 indicates that institutional investors still lack pessimism. The majority of institutional investors are still convinced that the Bitcoin price can rise further. From the perspective of the derivatives markets, nothing seems to stand in the way of a sustained breakthrough of the psychologically important $20,000 mark.
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