Even if Evergrande’s implosion shook the stock market, traders would still buy when Bitcoin fell


Bitcoin (Bitcoin) Investors seem to be concerned about the growing speculation of China’s second-largest real estate developer, Evergrande Group, Will default on its debt of 300 billion U.S. dollars. These concerns are reflected in the global stock market, which fell 1.5% to 3% when the market opened this morning.

Despite price fluctuations, BTC Outflow from the exchange (net withdrawal) A trend that has lasted for several months, especially on Coinbase Pro.

Traders also know that each exchange has different user profiles. For example, compared to FTX, which is known for having more conservative customers, Bybit’s liquidation tends to be more extreme.

Take today’s price below $43,000 as an example, which led to the liquidation of a $1 billion long contract led by Bybit, even though there were $2.34 billion in open futures contracts. This figure is lower than Binance’s US$3.66 billion and FTX’s US$2.51 billion liquidation.

Bitcoin futures cleared for the past 24 hours on September 20. Source: Bybt.com

The above data shows that Bybit traders are more willing to take risks and usually use higher leverage. At the same time, Binance and FTX derivatives investors are less affected by the daily 11% negative volatility.

Professional traders remain neutral to bullish

To understand the bullish or bearish propensity of professional traders, one should analyze the futures premium (or basis). This indicator measures the difference between long-term futures contracts and the current level of the spot market.

In a healthy market, the annualized premium is expected to be 5% to 15%. This situation is called a futures premium. This price gap is caused by sellers asking for more money to postpone the settlement time.

Whenever the indicator diminishes or becomes negative, a red alert will appear, which is called “backward”.

Bitcoin 3-month futures annualized benchmark. Source: Laevitas.ch

As mentioned above, the current 7% annualized premium is neutral, but consistent with last month’s average. If professional traders become worried or bearish, the indicator will fall below 5%.

Long-short ratios of top traders show buying activity

Investors should monitor the long-short ratios of top traders on leading cryptocurrency exchanges to accurately measure the positioning of professional traders. This indicator provides a complete view of traders’ effective net positions by collecting data from multiple futures and margin markets.

OKEx and Binance’s top Bitcoin long-short ratio. Source: Bybt.com

It is worth emphasizing that each exchange collects data from top traders in different ways, because there are multiple ways to measure a client’s net exposure. Therefore, any comparison between multiple suppliers should be based on percentage changes rather than absolute numbers.

The long-short ratio of top OKEx traders has increased from 8% supporting long positions to 54% at present, which is the highest level in ten days. On the other hand, despite the Bitcoin price adjustment, Binance derivatives traders still maintain a 10% ratio to support long positions.

Both figures confirm that retail traders may be more affected due to high leverage bullish positions. At the same time, professional traders either keep their positions or use discounted prices to increase their long positions.

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