This key Bitcoin price indicator shows that professional traders buy every dip


Bitcoin (Bitcoin) May not be able to maintain the $42,000 support level, which is a slightly bearish sign for many people.Interestingly, the decline occurred shortly after Saudi Arabia’s largest oil exporter, Saudi Aramco. Denies claiming to start mining Bitcoin.

Top traders on the exchange seized the opportunity to increase leveraged long positions, which is an obvious bullish indicator. In addition, margin traders have been increasing their stablecoin borrowings, which shows that whales and professional traders expect more room for upside in cryptocurrencies.

Bitcoin rose from $34,000 to its highest level since May 20. 24% of the weekly rebound was caused by The number of “active entities” surged by 30%, According to Glassnode. Despite the lacklustre price performance, this indicator may trigger these savvy traders to increase their positions.

Professional traders are using leverage to buy stocks under $40,000

OKEx’s top traders’ BTC long-short ratio (above) and Bistamp’s BTC price (in U.S. dollars) (below). Source: OKEx & TradingView

Notice how OKEx’s top trades increased their Bitcoin longs from 0.68 on July 31 to 1.16 two days later. The 0.68 ratio shows that the long positions of these whales and professional traders are 32% smaller than their respective short positions, and these positions benefited from falling prices.

On the other hand, even if the Bitcoin price fell below $40,000 on August 2, the long-to-short position of 1.16 rose by 16%, reflecting confidence.

However, it is impossible to know whether these traders closed short positions or effectively increased long positions. In order to better understand this movement, it is necessary to analyze margin loan data.

Provide more insights into the loan market

Margin trading allows investors to borrow cryptocurrencies to take advantage of their trading positions, thereby increasing returns. For example, you can borrow Tether to buy cryptocurrency (USDT) To increase exposure. On the other hand, borrowing bitcoins can only be used to go short, betting that the price will fall.

Unlike futures contracts, the balance between long and short margin positions does not always match.

OKEx USDT/BTC margin loan ratio. Source: OKEx

The above chart shows that traders recently borrowed more Tether, and the ratio increased from 2.00 on July 30 to 2.50. The data is definitely bullish because the indicator is good for stable currency borrowing by 2.5 times. In the face of the recent decline in BTC prices, it has also shown resilience.

Although Bitcoin has pulled back 9% from its high of $42,600 in the early hours of August 1, the derivatives data undoubtedly indicate that OKEx’s top traders have increased their long positions.

Unlike retail investors, these heavyweight traders can bear some trouble, although neither long to short indicators nor margin lending show signs of excessive leverage.

Currently, facing the natural correction that occurred after the 11-day rally, the bulls seem to be confident.

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