Bitcoin (BTC<\/a>) showed weakness on Aug. 15, posting a 5% loss after testing the $25,000 resistance. The move liquidated over $150 million worth of leverage long positions and has led some traders to predict a move back toward the yearly low in the $18,000 range.<\/p>\n The price action coincided with worsening conditions for tech stocks, including Chinese giant Tencent, which is expected to post its first-ever quarterly revenue decline. According to analysts, the Chinese gaming and social media conglomerate is expected to post quarterly earnings around $19.5 billion, which is 4% lower than the previous year.<\/p>\n Moreover, on Aug. 16, Citi investment bank slashed Zoom Video Communications (ZM) recommendation to sell, adding that the stock is “high risk.” Analysts explained<\/a> that a challenging post-COVID dynamic, plus additional competition from Microsoft Teams, potentially caused a 20% drop in ZM shares.<\/p>\n The overall bearish sentiment continues to plague crypto investors, a movement described by influencer and trader @ChrisBTCbull, who mentioned that a simple rejection at $25,000 caused traders to post sub-$17,000 targets.<\/p>\n After #Bitcoin<\/a> didn’t break price through $25000, all CT started writing about the price again $16k-17k<\/p>\n I think it’s time to open long#trading<\/a><\/p>\n \u2014 Chris (@ChrisBTCbull) August 16, 2022<\/a><\/p><\/blockquote>\n Monitoring margin and options markets provides excellent insights into understanding how professional traders are positioned. For instance, a negative read would happen if whales and market makers reduced their exposure as BTC approached the $25,000 resistance.<\/p>\n Margin trading allows investors to borrow cryptocurrency to leverage their trading position, increasing returns. For example, one can increase exposure by borrowing stablecoins to buy an additional Bitcoin position.<\/p>\n On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. Unlike futures contracts, the balance between margin longs and shorts isn’t always matched.<\/p>\n The above chart shows that OKX traders’ margin lending ratio has remained relatively stable near 14 while Bitcoin price<\/a> jumped 6.3% in two days only to be rejected after hitting the $25,200 resistance.<\/p>\n Furthermore, the metric remains bullish by favoring stablecoin borrowing by a wide margin. As a result, pro traders have been holding their bullish positions, and no additional bearish margin trades emerged as Bitcoin retraced 5.5% on Aug. 16.<\/p>\n Related: <\/strong>Bitcoin miners hodl 27% less BTC after 3 months of major selling<\/em><\/strong><\/a><\/p>\n There\u2019s uncertainty about whether Bitcoin will make another run toward the $25,000 resistance but the 25% delta skew is a telling sign whenever arbitrage desks and market makers overcharge for upside or downside protection. <\/p>\n The indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put options premium is higher than risk call options.<\/p>\n The skew indicator will move above 10% if traders fear a Bitcoin price crash. On the other hand, generalized excitement reflects a negative 10% skew.<\/p>\n As displayed above, the 25% delta skew has barely moved since Aug. 11, oscillating between 5% and 7% most of the time. This range is considered neutral because options traders are pricing a similar risk of unexpected pumps or dumps.<\/p>\n If pro traders entered a “fear” sentiment, this metric would have moved above 10%, reflecting a lack of interest in offering downside protection.<\/p>\n Despite the neutral Bitcoin options indicator, the OKX margin lending rate showed whales and market makers maintaining their bullish bets after a 5.5% BTC price decline on Aug. 16. For this reason, investors should expect another retest of the $25,000 resistance as soon as the global macroeconomic conditions improve.<\/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\n
Margin traders remain bullish despite the $25,000 rejection<\/h2>\n
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Option markets hold a neutral stance<\/h2>\n
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