Bitcoin (BTC) traders may be nervous about a decision on a Federal Reserve rate hike, but research shows that the bulls are moving broadly.
In a recent update on July 26, analytics firm Arcane Research labeled it a “correcting” sentiment among institutional traders.
Caution mixed with “improving feeling”
While attention is focused on the possibility of an impending deep macro low for BTC/USD, it appears that not every investor group is ready to rush for an exit.
Even at current prices, down 70% from all-time highs, the mood among institutions is strengthening. For Arcane, the proof is in the increasing premium being paid by CME bitcoin futures clients.
This premium, while still low by historical standards, has been trending upward since the second half of July.
“Basic premiums on CME and offshore exchanges are now sitting at similar levels, indicating that market sentiment is balanced among different groups of traders,” the update said.
“While the base premium on the CME has increased, it is still only 2.2%, a relatively low level historically. This indicates that although sentiment is improving, traders remain cautious.”
In a similar trend, funding rates on derivatives platforms are currently slightly negative, pointing to a conservative view of future price action on the part of traders. A deeply negative average funding rate would suggest that the overriding view is that a price crash is about to occur.
“Still, funding rates are significantly higher than for most of June, when the effects of the contagion ravaged the market,” Arken continued.
As Cointelegraph reported, the Crypto Fear and Greed Index also continues to provide a commentary on rising investor confidence, recently ending its longest tenure in its lowest “extreme fear” zone.
Meanwhile, Arcane cautioned about the extent of leverage in operations on a market expressed in “advanced” open interest.
“This high leverage makes the market vulnerable to a short or long squeeze, with a significant price movement on either side,” it added.
No discount for GBTC “Premium”
Still struggling in the current environment, Grayscale Bitcoin Trust (GBTC) is showing little sign of improvement.
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As of July 27, the giant bitcoin fund still had a negative “premium” of over 30%, marking some of its biggest discounts on the bitcoin spot price in history.
According to data from on-chain monitoring resource Coinglass, the GBTC discount on the day was 31.75%, which is equivalent to buying bitcoin for around $14,700.
As previously noted by Cointelegraph, Grayscale is currently involved in legal action against US regulators for refusing to allow bitcoin spot-based exchange-traded funds (ETFs) to market. GBTC, once enabled, should be converted into such an ETF product, the firm has said.
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