The price of Bitcoin is back at $ 50,000, but how exactly “bullish” are the bulls?

Cryptocurrency markets have risen 12.5% ​​in the past seven days to reach a market cap of $ 2.44 billion. However, this move does not appear to inspire confidence as the same level was tested 16 days ago when a 27% retracement followed the ether (ETH) attempt to break $ 3,650 over the next six days.

Regulation appears to be a key factor for buyers, as the US House of Representatives is expected to vote on the $ 1,000 billion infrastructure bill this month. In addition to defining who qualifies as a broker, the legislation would impose anti-money laundering (AML) and know your customer (KYC) type requirements on many types of cryptocurrency transactions, which could also be detrimental to DeFi protocols.

As noted above, the negative performance seen in the top 10 cryptocurrencies has had an impact on investor sentiment over the past 30 days. For this reason, it is important to measure more than the nominal price of Bitcoin. Traders should also analyze indicators derived from BTC, such as futures market premium and option asymmetry.

Futures premium shows traders are slightly bullish

The base rate is also often referred to as a term premium and it measures the difference between longer term futures contracts and current spot market levels.

An annualized premium of 5-15% is expected in healthy markets, which is a situation known as contango. This price difference is due to the fact that sellers are asking for more money to withhold payment for longer.

As illustrated above, the current annualized premium of 9% is neutral but shows an improvement over the previous two weeks. This indicates that traders are cautiously bullish, leaving room for further long leverage when confidence is fully restored.

Options traders leave fear mode

To exclude the externalities specific to the futures instrument, it is also necessary to analyze the options markets.

The 25% delta asymmetry compares similar call (buy) and sell (put) options. The metric will turn positive when “fear” prevails, as the premium of protective puts is higher than similar risky calls.

The reverse is true when market makers are bullish, causing the 25% delta asymmetry indicator to go into the negative zone. Readings between minus 8% and plus 8% are generally considered neutral.

Notice how Bitcoin options traders entered the ‘fear’ level on September 25 as the $ 41,000 support was tested multiple times. Nevertheless, a drastic change has taken place since September 30 and the indicator is now in a neutral zone.

As it stands now, both the basis of futures and the 25% asymmetry of options show a typical “half-full glass” scenario. This means that even though Bitcoin hit its highest level in 27 days and breaks through the resistance of $ 50,000, there is still room for buyers to rely on additional leverage before the metrics show signs. overextension or euphoria.

A break of $ 50,000 with the current meager derivatives data would generally be interpreted as weakness. However, given that the full crypto cap is still in the same place as 30 days ago and the regulatory concerns unmitigated, there is no reason for concern. At the moment, neither the futures nor the options markets are showing signs of falling.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move involves risk. You should do your own research before making a decision.