Since May 10, the Bitcoin (BTC<\/a>) chart shows a relatively tight range of price movement and the cryptocurrency has failed to break the $32,000 resistance on multiple occasions.<\/p>\n The choppy trading partially reflects the uncertainty of the stock market as the S&P 500 Index ranged from 3,900 to 4,180 in the same period. On one side, there has been economic growth in the Eurozone where the gross domestic product grew 5.1% year over year. On the other, inflation continues to soar, reaching 9% in the United Kingdom.<\/p>\n Further adding to Bitcoin’s volatility was the digital assets regulatory framework proposal<\/a> introduced to the U.S. Senate on June 7. The 69-page bipartisan bill is supported by Senator Cynthia Lummis of Wyoming and Senator Kirsten Gillibrand of New York and it addresses the CFTC\u2019s authority over applicable digital asset spot markets. <\/p>\n On June 3, South Korea’s Financial Supervisory Service (FSS) began an inquiry with 157 payment gateway services<\/a> that work with digital assets. Previously, on May 24, South Korean officials opened an investigation against Do Kwon<\/a>, the primary figure in the Terra incident.<\/p>\n The U.S. Securities and Exchange Commission (SEC) also broke out an investigation against Binance Holdings<\/a> on June 6. Binance is the world’s largest crypto exchange in volume terms and the SEC is evaluating whether the BNB token initial coin offering violated securities rules.<\/p>\n On June 6, IRA Financial Trust, a platform providing self-directed digital asset retirement and pension accounts, filed a lawsuit against Gemini cryptocurrency exchange<\/a> and claimed that a Feb. 8 breach led to a $36 million loss in crypto assets from customer accounts under Gemini’s custody.<\/p>\n Let’s look at Bitcoin’s futures data to understand how professional traders are positioned, including whales and market makers.<\/p>\n Traders should analyze Bitcoin futures market data to understand how professional traders are positioned. The quarterly contracts are experienced traders’ preferred instrument to avoid the perpetual futures\u2019 fluctuating funding rate.<\/p>\n The basis indicator measures the difference between longer-term futures contracts and the current spot market levels. The Bitcoin futures annualized premium should run between 5% to 10% to compensate traders for “locking in” the money for two to three months until the contract expiry.<\/p>\n Bitcoin’s futures premium has been below 4% since April 12, a reading typical of bearish markets. Even more concerning is that the last time these professional traders were bullish was over six months ago when the metric surpassed the 10% threshold.<\/p>\n To exclude externalities specific to the futures instrument, traders must also analyze the Bitcoin options markets. The 25% delta skew is a telling sign for when Bitcoin market makers and arbitrage desks are overcharging for upside or downside protection.<\/p>\n During bullish markets, options investors give higher odds for a price pump, causing the skew indicator to move below negative 12%. On the other hand, a bear market’s generalized panic induces a positive 12% or higher skew.<\/p>\n The 30-day delta skew has ranged from 12.5% to 23% between June 1 and 7, which signals options traders are pricing higher odds of a bearish movement. Still, it shows a moderate sentiment improvement from the previous couple of weeks.<\/p>\n Cryptocurrency regulation and weak economic numbers are clearly weighing on investor sentiment and derivatives data shows professional Bitcoin traders avoiding leveraged long positions, plus they are reluctant to take downside-risk.<\/p>\n At the moment, it\u2019s clear that bears are comfortable with setting $32,000 as a resistance level and repeat drops to the $28,200 level are likely to continue. <\/p>\n The views and opinions expressed here are solely those of the <\/em>author<\/em><\/a> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<\/div>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/4466c791-1427-48fd-a297-ae7c3795c76b.png\")
Derivatives metrics reflect investors\u2019 bearish expectations<\/h2>\n
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