Wednesday , October 5 2022

Here are 3 key pointers in moving your Bitcoin price above $ 20,000



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Last week, Bitcoin (BTC) price rises to $ 20,000, causing some traders to lose patience. In the eyes of some of them, the lack of a bullish moment is problematic, especially since BTC checked $ 16,200 a week ago.

Experienced traders know that there are important indicators that act as indicators of a trend reversal. These are the major trading positions of volumes, futures premiums and major exchanges.

A handful of negative indicators may not be present before each drop, but often there are some signs of weakness. Each merchant has their own system, some of which only work if they meet three or more terms, but there is no set rule for knowing when to buy or sell.

Do not trade futures contracts below spot exchanges

Some websites host trading indicators that claim to show a long to short ratio for different assets, but in reality, they compare the number of bids and the number of bids arranged.

Others will be referred to Leaderboard data, so they will monitor accounts that are not excluded from the rankings, but this is not accurate.

One of the best ways is to monitor the futures financing rate (reverse swap).

The open interest of buyers and sellers of continuous contracts is always matched in any futures contract. Since each trade requires a buyer (long) and a seller (short), there is no way to create an imbalance.

Financial rates ensure that there is no currency risk imbalance. When (short) sellers demand the highest profit, the financial rate turns negative. So, it is the traders themselves who pay the fees.

Weekly Funding Rates for BTC Permanent Futures. Source: Digital Asset Data

Rapid swings to the negative range indicate a strong willingness to open short positions. Investors will monitor two exchanges simultaneously to avoid potential discrepancies.

As a favorite tool of retailers, funding rates can cause some distortions, resulting in excessive jumping.. Professional traders dominate long-term futures contracts with fixed expiration dates.

A trader can measure his optimism by estimating how many valuable futures he is considering compared to the typical spot market.

BTC Futures Premium 2021 January. Source: Digital Asset Data

Note how fixed calendar futures are usually traded at a premium of 0.5% or more compared to regular spot exchanges.. Whenever this premium fades or becomes negative, it is a scary sign. Such a situation, also known as reversal, indicates a strong recession.

It is important to monitor the volume

In addition to monitoring futures contracts, good traders also monitor volume in the spot market. Breaking down major defensive levels is less costly. Low volumes usually indicate a lack of confidence. Therefore, there should be strong trading volume along with major price fluctuations.

Total number of BTC spot exchanges. Source: Coinalyze.net

Recent volumes are above average, however Traders should be skeptical of inflation below $ 3 billion per day, especially considering the last 30 days.

According to last month’s data, Volume will be an important metric to watch out for as traders try to raise the price of Bitcoin by $ 20,000.

Price changes can be expected in the long and short ratio of the best traders

Another important monitor for metric-expert investors is the long and short ratio of leading traders that can be found on major cryptocurrency exchanges.

There are often inconsistencies in the methodology of exchanges, so readers should observe changes rather than absolute numbers.

List of Best BTC Traders Long and Short Deals in Binance Source: Finance

The abrupt move below the short ratio from 1.00 length would be a worrying sign in the example above.. This is because 30-day historical data and the current 1.23 figures support longer contracts.

As mentioned above, this relationship between exchanges can vary considerably, but this effect can be neutralized by avoiding direct comparisons.

List of Best BTC Traders Long and Short Deals on OKEx Source: Bybt.com

Unlike Binans, it is common for leading OKX traders to hold below 1.00, although this does not indicate a recession. Based on their 30-day data, numbers below 0.75 should be considered.

There is no set rule or method for predicting a large fall as some traders require different indicators before entering small spaces or closing their long positions.

Observing the best traders ‘funding rates, spot volumes and long-term short ratios gives a clearer view of the market than reading the general traders’ relative strength index and oscillator patterns. Moving average convergence deviation.

This is because the quantities discussed are a direct indicator of sentiment from professional traders, and it is crucial that BTC get a clear view of this as it seeks to break away from the $ 20,000.

Here are just a few of the views and opinions expressed Author And do not reflect the views of the Cointelegraph. Every investment and commercial movement carries a risk. You need to do your own research when making a decision.

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