BTC derivatives analysis – are professional traders increasingly optimistic?

To understand where BTC’s bull or bear professional traders are located, we should analyze base rate futures. This indicator is also known as futures premium and measures the difference between futures contracts and the current spot market on exchanges.

Quarterly futures are the preferred tools of whales. Although derivatives may seem complicated for retailers due to their settlement date and price difference spot market, the most well – known advantage is the absence of fluctuating funding rates.

3-month BTC futures – base rate. Source: Laevitas.ch

Three-month futures are usually traded with 5 percent to 15 percent annual premium. This is considered to be the cost of arbitration. By postponing the settlement, the sellers demand a higher price, and this causes a price difference.

Notice 9 percent bottom on November 27, when BTC tested $ 56,500 support. Then, after rising above $ 58,000 on Monday, the indicator moved back to a healthy 12%. Even with this movement, there is no sign of excitement, no not one of the last weeks could be described as a bearish period.

BTC loan markets

Margin trading allows investors to borrow cryptocurrency to take advantage of their trading position, thereby increasing returns. For example, it is possible to buy BTC by borrowing Tether (USDT). On the other hand, borrowing BTC can only be used to short it out. Unlike futures, the balance between long and short margins is not necessarily balanced.

OKEx USDT / BTC margin lending ratio. Source: OKEx

When the ratio of loans to margins is high, it means that the market is bullish – on the contrary, the low loan ratio signals that the market is bearish.

Chart above shows that traders have been borrowing more BTC recently, as the ratio fell from 21.9 on November 26 to the current 11.3. However, the data are in absolute terms to upward trend, because the indicator strongly favors the lending of stablecoins.

Derivatives data show zero enthusiasm from professional traders, although BTC gained 9% of the $ 53,400 low on November 28. Unlike retailers, these experienced whales avoid FOMO, although the margin loan indicator shows signs of over-optimism.