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Top traders add leverage positions

2 min read

The price of BTC failed to keep around $ 42,000 and for many it is a slightly bearish indicator. Top traders on the  exchanges, however took the opportunity to add leverage positions which is clear ascent indicator. Margin traders in addition increase their loans to stablecoins. This suggests that whales and professional traders expect more growth from cryptocurrencies.

24% weekly increase, which reached BTC, was, according to Glassnode, driven by a 30% increase in the number of “active entities”. This indicator may have forced these traders increase your position despite poor price performance.

Top traders leverage under $ 40,000

OKEx BTC long-to-short ration top trederov vs.  BTC / USD.  Source: OKEX and TradingView
OKEx BTC long-to-short ration top trederov vs. BTC / USD. Source: OKEX and TradingView

Notice how top OKEx traders increased their BTC longs from 0.68 on July 31 to 1.16 two days later. The 0.68 ratio indicates that the long positions of whales and professional traders were 32% smaller than their short positions.

On the other hand, 1.16 long-to-shorts favored upward positions by 16% and reflected confidence, although the price of BTC fell below $ 40,000 on August 2.

However, there is no way to find out whether these traders closed short positions or added long. To better understand this movement, margin lending data needs to be analyzed.

Margin trading allows investors to borrow cryptocurrency to take advantage of their trading position, thereby increasing returns. For example, a person can buy cryptocurrencies by borrowing Tether (USDT), thereby increasing their position. On the other hand, borrowing BTC can only be used for its short.

Unlike futures contracts, the balance between margin longs and shorts is not always the same.

OKEx USDT / BTC margin lending ratio.  Source: OKEx
OKEx USDT / BTC margin lending ratio. Source: OKEx

The graph above shows that traders have been borrowing more Tether lately, as the ratio increased from 2.00 on July 30 to 2.50. It also shows resilience to the recent decline in BTC prices.

OKEx’s top traders even added long positions, although BTC fell 9% from the top of $ 42,600 in the first hours of August 1.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.
BlackRock (IBIT), the Grayscale Bitcoin Trust (GBTC), Fidelity (FBTC), Ark Invest/21Shares (ARKB), Bitwise (BITB), Franklin (EZBC), Invesco/Galaxy (BTCO), VanEck (HODL), Valkyrie (BRRR), WisdomTree (BTCW), Hashdex (DEFI)

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