Bitcoin ETF hopium fades as on-chain and futures data reflect traders’ muted activity

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Bitcoin (BTC) price has been trading between $29,900 and $31,160 for the past 18 days, causing concern among investors seeking clarification as the lack of a clear trend. .

Investors are expected to be more positive and optimistic after Bitcoin hit a 13-month high with a 25.5% gain from June 15 to June 23, but the $31,000-plus price tag is expected to grow. BTC’s inability to maintain price and neutral on-chain and derivatives data are at play. It does not support this theory.

Bitcoin ETF Hopes Face Tight Regulatory Environment

The current price situation is of particular concern due to expectations generated after BlackRock, the world’s largest fund manager, filed for a spot Bitcoin ETF on June 16. Some analysts predict Bitcoin price will hit $100,000 by the end of the year, adding to the frustration of traders betting on further gains.

It is worth noting that investors experienced a price consolidation around $30,000 in mid-April, but it lasted less than a week before the price eventually fell to $28,000. This move explains why investors are reluctant to open positions at current price levels and prefer range trading.

Despite initial excitement about the possibility of the U.S. Securities and Exchange Commission (SEC) approving Bitcoin products for traditional financial markets, regulatory action against major exchanges such as Coinbase and Binance has sent prices negative. is under pressure.

This positive factor combined with a more stringent regulatory environment may have been a major contributor to Bitcoin’s recent price volatility, and analysis of blockchain data could provide insight into network usage. There is a nature.

Bitcoin on-chain activity does not show significant improvement in activity

Network activity should be the starting point when it comes to blockchain-based analytics. This analysis requires a perspective beyond just trade and exchange flows. Cryptocurrencies are designed to facilitate free transactions and registration of digital assets, so the number of active users is very important.

Bitcoin’s seven-day active addresses failed to exceed 1 million, only reaching the same level as three months ago. Additionally, his peak of 1.02 million addresses in April 2023 is down 16% from his all-time high in January 2021. Therefore, on-chain data shows a stagnant number of active users on the Bitcoin network using addresses as proxies. .

Some might argue that recapturing April 2023 levels of active addresses would be enough, but to assess demand from institutional investors, we need to analyze the number of addresses in the network with a minimum of 100 BTC. need to do it. This is worth over $3 million at current price levels. .

Upon closer inspection, it’s clear that the metric hasn’t changed in the last few months for 15,900 addresses. This suggests that the number of whales accumulating bitcoins has not increased during that period.

Considering this and the fact that active addresses have yet to reach new highs, on-chain indicators suggest that the ETF launch has yet to spark bullish momentum.

Bitcoin Derivatives Improve, But Majority Are Neutral

To see if the price reflects a slump in network activity, we need to analyze Bitcoin derivatives indicators and measure the demand for leverage from professional traders. On neutral markets, Bitcoin quarterly futures contracts typically trade at a premium of 5-10% per annum, known as contango, but this is not unique to crypto markets.

Bitcoin futures premiums crossed the neutral 5% threshold on June 26, just five days after breaking the $30,000 support level. It took a full 18 months for investors to turn bullish on leveraged long positions and reach their highest level since June 2022. This greatly increases the likelihood of a liquidation or panic selling if the Bitcoin price falls by 8% in a short period of time.

It’s also helpful to keep an eye on the options market, as 25% delta skew is a telltale sign that arbitrage desks and market makers are overcharging to protect upside or downside. Basically, when a trader expects Bitcoin price to fall, the skew indicator he tends to rise above 7% and has a negative 7% skew during the excitement stage.

However, a delta skew of 25% failed to maintain levels below the neutral threshold for more than 4 days. According to the Options Price Index, the only moderately bullish period was from July 1 to July 5. The current balance of demand between call options and protective put options shows a lack of confidence from professional traders.

These findings are particularly disappointing given that senior Bloomberg analysts estimated a 50% chance of Bitcoin ETF approval. After the recent price rally above $30,000, on-chain and derivatives data are expected to reflect more optimism, although this is likely due to Bitcoin’s price falling 56% below its all-time high. , may be subject to impending court rulings against the exchange.

After all, at the moment, on-chain and derivatives data fail to support the bullish momentum that will sustain further price gains.

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