2 Key Bitcoin Price Indicators Show Pro Traders Are Waiting for the Next High

Bitcoin price surges to $36,400 as key indicators show top traders are exercising caution.

Bitcoin (BTC) recently rallied to $36,400, but top traders at Huobi, OKEx, and Binance are not buying Bitcoin. Unlike savvy institutional investors who may be eager to protect themselves from the devaluation of fiat currencies, more focused crypto investors appear to be waiting for Bitcoin to fall.
On January 4, the U.S. Office of the Comptroller of the Currency announced that it would allow banks to use stablecoins. Institutional investors may be celebrating the news. This further validates the crypto industry and could lead to increased institutional participation in the crypto space.
Typically, after Bitcoin reaches a new all-time high, the price of Bitcoin will retreat as some traders take profits and shorts consider opening shorts near the new "top."
Traders focused on cryptocurrencies are well aware of Bitcoin’s volatility, with the recent drop to $27,000 being a prime example.
To effectively gauge how crypto-focused traders are positioning themselves, investors should monitor the long-short ratios of top traders on major cryptocurrency exchanges.

Top traders BTC long/short ratio Source: Bybt.com

Note that Huobi’s top traders reduced their long positions over the past two days. Meanwhile, Binance’s top traders were mostly sidelined throughout the period.
It is important to note that exchanges collect data on top traders differently, as there are multiple ways to measure a client's net exposure. Therefore, any comparisons between different data providers should be based on percentage changes rather than absolute numbers.
OKEx has been the lone exception, as its top traders indicator showed investors holding short positions during Bitcoin’s brief sell-off on Jan. 4, but the trend reversed as support at $31,000 was reestablished. This data suggests these traders are chasing the market rather than betting ahead of volatility.
Generally speaking, it’s safe to say that “top” traders are not dominating the current bull market.
Futures Funding Rates Remain Stable <br />Perpetual contracts (also known as inverse swaps) have an embedded rate that is usually charged every eight hours. When the buyer (long) demands more leverage, the funding rate becomes positive. Therefore, it is the longs who pay the fee. This problem is particularly true during bull markets, when there is usually a greater demand for longs.

BTC perpetual futures funding rate Source: Digital Assets Data

As shown above, the funding rate on the FTX exchange climbed to an unusually high 5% on January 4. Setting aside this oddity, an average weekly funding rate of 1% appears quite modest considering that Bitcoin has risen 18% over the past six days.
At present, it is clear that top traders on major exchanges are not the main force behind the recent buying activity. Based on their long and short position data and funding rates on derivatives exchanges, these short-term traders appear to be waiting for lower entry points. (Cointelegraph)