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Over the past few days, the price of Bitcoin (BTC) has underperformed Ether (ETH) by almost 20%. Even though BTC appears to be struggling to break through the $ 18,800 barrier, both cryptocurrencies show the same uptrend according to derivatives market data.
Ether is entering a parabolic rally as its Eth2 network launches, and this optimism is reflected in the options markets. Despite the absence of similar price action from BTC, Bitcoin traders appear unfazed and the data shows they are still extremely bullish.
Futures contracts for Ether and BTC are still bullish
The basic indicator analysis is a useful procedure as it compares the level of futures contracts to the current price on regular spot exchanges.
Healthy markets typically show an annualized basis of 5% to 10%, in a situation known as contango. On the other hand, futures trading at a discount usually occurs in strongly bearish markets.
The basis for Ether futures is between 10% and 20%, indicating bullish expectations. Instead of leaving Ether to a derivatives exchange, the seller prefers to use them for staking. Hence, it is natural to charge a premium for trading.
The BTC futures premium behaves similarly, despite today’s poor negative performance. Had traders given up on expectations of a continued bull run, this indicator would have fallen below 10% annualized.
There is only one reason why a trader pays such a high premium on a futures contract, and the reason is optimism. This indicator can be interpreted as a tax for carrying leveraged long positions.
Options traders are unwilling to open bearish positions
Viewing the tilt of Delta 25 also provides useful insight into the sentiment and position of professional traders.
A positive asymmetric delta of 25% indicates that put (puts) options cost more than similar calls, indicating bearish sentiment. On the other hand, a negative bias suggests an uptrend.
The indicator generally hovers between -20% and + 20% in neutral markets, although this has not been the case for Ether in recent weeks.
Note how the base of Ether futures touched extreme optimism levels on November 21, which is highly unusual.
This data suggests that options traders are unwilling to sell upside protection. At -20%, the bias indicator indicates that derivative investors remain bullish despite the 28% rebound over the past seven days.
BTC options traders should be expected to be slightly less bullish after today’s negative performance, but that was not the case.
The data shows that BTC options traders are currently remarkably bullish, regardless of how difficult the past two days have been. Thus, there is no indication of a change in sentiment from derivative markets.
While there are several ways to read the same chart depending on technical analysis, BTC has not specifically transpired optimism.
Traders who prefer shorter time frames might have a bearish interpretation of recent price action. Meanwhile, professional investors know how unpredictable the BTC markets are. Therefore, they are not ready to lower their positive expectations on a whim.
For now, there doesn’t seem to be any reason to doubt Bitcoin’s positive momentum. Even though Ether has outperformed it, traders are showing the same confidence in both cryptocurrencies.
The views and opinions expressed herein are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You need to do your own research when making a decision.
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