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Key Bitcoin price metric signals traders are positioned for $50K BTC

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Bitcoin (BTC) price posted a 25% gain after this week’s news of Tesla’s $1.5 billion BTC investment came out. Prior to this reveal, BTC was lagging behind Ether’s (ETH) performance by 7.5% but the numerous bullish events of the past few days helped BTC to hit a new all-time high at $48,900.

Previous to Tesla’s announcement, BTC price was trading in the $30,000 to $41,500 range for nearly 3 weeks and once the price broke out one would expect pro traders and arbitrage desks to follow the bullish trend.

Rather than flipping long, many of the top traders opened short positions as BTC commenced its 25% move. This seems risky given that this week Bitcoin received praises from JPMorgan’s co-president and regulators approve a BTC ETF approval in Canada.

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Bitcoin and Ether USD prices at Bitstamp. Source: NYDIG Digital Assets Data

Historical data shows that Bitcoin price actions tend to trade in tandem with Ether, which has been strongly bullish for months. Adding to this bullish scenario, Bitcoin’s Lightning Network announced a record node count and the total value locked (TVL) surpassed $42 million.

Mastercard also announced that it would support cryptocurrency payments on its network by the end of 2021.

These bullish signals contrast with the long-to-short net positioning metrics provided by major cryptocurrency exchanges.

This indicator is calculated by analyzing the client’s consolidated position on the spot, perpetual and futures contracts and it provides a clearer view of whether professional traders are leaning bullish or bearish.

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It is important to note that there are occasional discrepancies in the methodologies between various exchanges, so viewers should monitor changes instead of absolute figures.

Exchange’s top traders BTC long-to-short ratio. Source: Bybt.com

Since Feb. 8, when the Tesla announcement took place, exchanges’ top traders have kept their net positions relatively unchanged.

Before Bitcoin’s 25% rally, Binance had a 1.33 ratio favoring longs, which is in line with the previous week. This indicator peaked at 1.53 on Feb. 10, but has since then returned to 1.31.

On the other hand, Huobi top traders had a 0.74 indicator ahead of Feb. 8, which remained flat for three days. On Feb. 11 as BTC rallied from $44,000 to $48,000, these traders began increasing net longs, reaching the current 0.80. Although this level is still favoring net shorts by 20%, it remains above the 0.75 level from Jan. 29.

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Lastly, OKEx top traders held a 14% net long position before the Tesla news came out. Although they’ve reverted to a 47% net short position on that same day, over the last four days the indicator has come back to 1.03. Currently, OKEx traders remain well below the 52% net long position from two weeks ago.

Staking could be capturing top traders

Top traders could have also moved their BTC off-exchange in search of better yield opportunities. Therefore, assuming that they’ve entered short positions solely by monitoring centralized exchanges’ could be a brash conclusion to reach.

As things currently stand, the long-to-short indicator does not show extreme net long positions from arbitrage desks, market makers, and whales. A balanced derivatives market suggests that there’s ample room for buying activity if BTC continues to rally to $50,000 and above.

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

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Bitcoin Drops as China Declares Crypto-Businesses Illegal

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  • China declared that cryptocurrency-related businesses are illegal
  • Bitcoin, Ether, and stablecoin Tether do not qualify as legal tender in China
  • BTC drops in price as the announcement went out

Once again, China reiterated its antagonistic stance on Bitcoin and the cryptocurrency industry as a whole.

In an announcement, the People’s Bank of China (PBOC) mentioned that BTC, ETH, and USDT are not legal tenders in China. They added that these cannot be used in the currency market.

Additionally, the central bank deemed all crypto-related businesses as illegal. This includes overseas exchanges serving residents within China and derivative transactions.

Following the news, Bitcoin’s price fell by almost $2,000 as the news circulated. This has been a common pattern whenever China FUD comes out.

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Earlier, China also reiterated its stance on crypto trading and mining while testing the Digital Yuan. According to the PBOC, it will continue releasing regulatory pressure over the crypto trading industry.

Despite the negative news, many analysts remain bullish on Bitcoin and the cryptocurrency industry as a whole. According to analyst Lark Davis, this is not new and will happen again in the future.

In a tweet, Davis mentioned that “The year is 2025, #bitcoin has just corrected from 400k to 250k on China banning BTC fears.”

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Can Bitcoin Surpass $6,000,000? Ethereum and Polkadot Creator Details Possible Future of Crypto

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Early Bitcoin developer and co-founder of Ethereum and Polkadot, Gavin Andresen, is outlining a future where BTC rises to a staggering $6,000,000 per coin.

Gavin Andresen, who took over as Bitcoin’s lead maintainer from founder Satoshi Nakamoto in 2011, just published a new blog post detailing how BTC’s theoretical evolution could look.

Andresen describes a “possible” scenario where Bitcoin hits a price tag of $6,000,000 by 2061, transaction fees 326x higher than they are now, and the blockchain is used chiefly by whales.

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“Imagine: it is the year 2061. The BTC price is six million US dollars – equal to about a million 2021 dollars because of inflation.

Miners are being rewarded 0.006103515625 BTC per block, plus transaction fees of about 5 BTC for 4,000 or so transactions ($7,500 per transaction).

But most BTC transactions don’t happen on the BTC network. Most BTC is locked up in multi-signature outputs secured using multiparty computation and mirrored on another chain as ‘wrapped’ tokens.”

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In his scifi scenario, Andresen says those who do remain on Bitcoin’s network will be incentivized to keep it alive.

“The transactions that do occur on the main BTC network are high-value, mostly between super-whale-size holders…

These whales maintain the BTC network forever. They are the miners and the transaction creators; they don’t care how high transaction fees go, because they receive as many fees as they pay.”

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However, Andresen says that by 2100, even those users would likely leave the blockchain.

“In the year 2100 the whales notice that the mining reward is basically zero… Eventually, there are zero new BTC being produced on the BTC network, and zero BTC circulating on the BTC network. There is nothing left to secure, and the chain stops.”

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

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Top Analyst Maps Bitcoin and Cardano Price Trajectories, Warns Best Entry Point for ADA May Be Gone

Crypto trader Michaël van de Poppe is looking at what’s ahead for Bitcoin (BTC) and the smart contract platform Cardano (ADA).

The analyst tells his 420,000 Twitter followers that the best entry point for Cardano may be gone after the asset bounced off a key support level at $1.86.

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“If you want to get into Cardano, this was the region where you would want to get into it, and the higher low that might be created.

So based on the daily timeframe, the best entry might be gone, but you’re still getting a better entry than the ones who have been buying around $2.80.”

Van de Poppe is now looking to see if ADA can turn resistance at the $2.37 level into support.

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If the markets correct further, he is keeping an eye on the $2.15 level as a potential buy zone.

“When you’re looking at the four-hour time frame, I think you’re getting the exact same view as what you have right now on Bitcoin and [Ethereum], actually. So you’re going to look for an entry point which is around the fact of $2.15, so anything in this region might be a good entry point if we get a corrective move.”

Looking at the Bitcoin pair, van de Poppe thinks that ADA will most likely consolidate briefly after retesting support at its previous all-time high.

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“We can see that we’ve had a beautiful retest of the previous high here too, and therefore some consolidation is most likely going to take place before we’re going to have new impulse waves.

So both the USDT and BTC pair are looking for continuation, and I think that’s just great, and I think that’s just what we want to see with the markets right now.”

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