Being a very volatile currency market, the BTC price has witnessed a steady decline. However, as per these two key metrics, it is at rock bottom and preparing for a rise like a phoenix. Since the December 4 meltdown, BTC struggled to maintain even a mere $47,500 support level, which eventually wiped out almost a whopping $840 million future contracts. The omicron version of the coronavirus is one of the potential reasons for the US inflation reaching 40 years high and the market drowning deep.
With the 26% price drop, the expert investors are increasing their holdings readily, unlike the newbies. According to the revelation of the MicroStrategy on December 9, 2021, they have apparently purchased over 1,434 Bitcoin, which results in a massive investment of 122,478 BTC.
According to heraldnet.com, this dip stemmed from a possible fear of contagion when the Chinese property developer, Evergrande, defaulted on the US dollar debt on December 9. Bears earned a profit of $300 million on his $1.1 BTC expiring on December 10.
Margin traders have a better edge since they can leverage their holdings by borrowing stablecoins and then adding the cryptocurrencies to the profits. They use this as a collateral option for short positions, which can be a good way to combat this price drop. This is why some experts track the total loan amounts of BTC and stablecoins to depict the optimism or pessimism rates of the investors.
The indicator displayed the longs by 90%, wherein only 10% of the total of Bitfinex was from stablecoin borrowing. Even less than 24 hours after the market drop, the margin longs were about 94%, indicating that even if the investors were slightly surprised, they still kept their positions intact. The 25% delta skew shifts to the negative side, which indicates that the market makers still are optimistic. The neutral readings fall between the negative and positive 8% range.
Prior to thi BTC meltdown, the delta skew rate was at 6%, neutral. After the panic, it hiked to 10% but is currently at 3%. With the minimal indications of stress, investors may begin to expect that BTC will now set an all-time high starting from early 2022.