- Bitcoin is still in a bullish zone despite the series of negative news in the space
- The trading volume of Bitcoin is declining on top trading platforms
- Professional traders are increasing their short positions
Bitcoin News Today – According to Bitcoin derivatives data, professional traders increased their short positions over the past three weeks. The new month is just a week old and the price action in the digital currency markets has been both worrisome and exciting. Bitcoin has seen a strong rejection at $10,900 and a quick bottom at $10,200 over the past week.
The Series of Negative Crypto News Has Spooked Investors
The sinusoidal price movement of the digital currency has been the norm over the past three weeks, and it has been horrible for the bears and bulls. Despite the reason for this up and down movement, the recent bearish news in the digital currency space has clearly startled investors.
In the last two weeks, BitMEX exchange was charged with multiple legal violations, criminals hacked KuCoin for $150 million, the top financial watchdog in the UK decided to ban digital currency derivatives exchanges, and John McAfee was arrested. All these bearish news were more than enough to break the ongoing 30-day correlation with the S&P 500, and it also shows that the market sentiment may have shifted.
Bitcoin (BTC) Price Today – BTC / USD
Throughout this year, there has been a strong correlation between Bitcoin and the S&P 500. There was hardly a week where the price action diverged between both markets, except in the first week of Sept. and over the past six days. BTC trading volume has been declining on top trading platforms, which is hard to frame as a positive.
This clearly shows the current level of investors’ interest. Nevertheless, one should not conclude that traders are bearish just because of volume metrics. For this scenario to happen, both sellers and buyers are not willing to trade at the current price range of the digital currency.
Traders Are Closing Long Positions and Increasing Their Short Positions
Excessive leverage from any of the sides would be reflected in the funding rate. This happens because of each perpetual futures contract having embedded margin usage fees. The system usually changes funding rates every eight hours to eliminate the possibility of exchange risk imbalance, and even though the open interest from both sellers and buyers are equal at all times, leverage can vary.
If the leverage of buyers is more than sellers, the funding rate would be positive and buyers would pay. The reverse is the case when future contract sellers are the ones requiring more margin. Data from some trading platforms also shows long-to-short net positioning of traders. This goes on to show that top crypto traders are neutral to short.