TL; DR
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BTC fell from a yearly high of ~48k to ~43k, following the ETF announcement, but the futures market is indicating positive movement in the coming months.
Full story
So Bitcoin is not doing so well.
(It appears that the approval of the Bitcoin ETF was a ‘buy the rumor, sell the news’ event).
Since the announcement last Wednesday, Bitcoin has fallen from a yearly high of ~48k to ~43k.
…and this gets investors excited.
Confused? This is what’s going on:
If you want to know where the market is thinks Bitcoin prices are about to be next – look no further than the futures market.
In other words: the place where people bet on the future price of Bitcoin.
Although the BTC price has recently taken a hit, the futures market’s long-short ratio predicts positive price movement in the coming months.
…cool, what the hell does that mean?
Think of the ‘long-short ratio’ as a ‘positive-negative expectation ratio’. The higher the ratio, the more positive the market outlook is on the price of Bitcoin.
Before the approval of Bitcoin ETF last week, the ratio was at a low of 0.86.
But as of yesterday that number was 2.86! This indicates a sharp increase in the expectation of upward price movements for Bitcoin.
So why the sudden rosy view on Bitcoin?
Our guess is that it is a combination of Bitcoin’s sell-off and Bitcoin’s slow accumulation through ETFs.
The idea is:
The market thinks Bitcoin is just about done selling, and from here on out what’s needed to push the price back up is steady buying pressure.
Buying pressure that the market expects to see coming from the Bitcoin ETFs in the coming months.
Whether it all goes according to plan is a completely different question…
But it is still a positive indication!