Bitcoin price drops to $43.5K, but data and BTC’s market structure project strength

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Bitcoin price dropped below $43,500, but noshitcoins says whale accumulation, the futures premium and options market data signals a buying opportunity.

, according to data from Glassnode. These investment vehicles in Canada have increased their holdings by 6,594 BTC since January to a historical high of 69,052 BTC under management. Currently, the Purpose Bitcoin ETF, a spot instrument, currently has $1.68 billion worth of assets.acquire $3 billion worth of BTCCoinMetrics data shows that the active 1-year Bitcoin supply reached 36.8% on April 5, its lowest level since September 2010.

The Bitcoin futures annualized premium should run between 5% to 12% to compensate traders for"locking in" the money for two to three months until the contract expiry. Levels below 5% are extremely bearish, while the numbers above 12% indicate bullishness.The above chart shows that this metric dipped below 5% on Feb. 11, reflecting traders’ lack of demand for leverage long positions. The sentiment changed on March 26 after the basis rate regained the “neutral” 5% threshold.

If those traders fear a Bitcoin price crash, the skew indicator will move above 10%. On the other hand, generalized excitement reflects a negative 10% skew.Data shows that the skew indicator has been ranging between 0% and 8% since March 9. Albeit not signaling fear, these options traders are overcharging for downside protection. From the BTC options markets perspective, there's a slightly higher risk for unexpected downward price swings.

The neutral-to-bearish Bitcoin derivatives data offers an interesting opportunity for bulls. If somehow the $47,000 resistance is broken, this will be a surprise for most investors. Two positive effects will arise from that event: a short squeeze from derivatives markets and room for buyers to use futures for leverage.

If Bitcoin’s futures premium had been running above 10%, traders would face a much higher cost to add long positions. Bulls seem better prepared to deal with the $47,000 price resistance considering the sound market structure that is marked by the absence of exaggerated buyers’ leverage and this provides better odds of success.

 

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