3 key metrics and disinterest from pro traders hint at Bitcoin price sell-off

For novice traders, FOMO can be a heavy burden to bear. Resisting the urge to buy Bitcoin (BTC) after a nearly 15% rally, which saw the price break both the $12K and $13K levels in less than 24 hours, is almost impossible.


Professional traders are more experienced and know precisely how to play these FOMO-inducing situations. As data has shown, they were mostly adding shorts up to October 20, right before the $12K rupture.

BTC futures aggregate liquidations. Source: Coinalyze.net

Most investors fail to grasp that being a pro trader does not mean all the emerging trends are played profitably. Instead, surviving when things go wrong is the true mark of success.


As BTC rocketed to $13,217, a total of $350 million worth of liquidations occurred, and the futures contract funding rate shows there was not excessive short leverage.

Perpetual contracts, also known as inverse swaps, have an embed rate usually charged every eight hours. When shorts are the ones demanding more leverage, the funding rate goes negative. Therefore, those shorts will be the ones paying up the fees.

BTC perpetual contracts funding rate. Source: Digital Assets Data

The above chart shows that such a situation hasn’t occurred over the past few weeks, at least not in a significant way. Thus, despite selling ahead of the price surge, top traders were not squeezed out of leveraged short positions.

Data show pro traders covered their shorts on Oct. 21 and they remain distanced from placing bullish bets. This action is supported both by crypto exchanges top traders long-to-short ratio and the futures contracts premium.

Pro traders covered shorts but are unwilling to go long

According to Huobi’s long-to-short ratio, there has been no sign of aggressive buying. Data indicates that top traders are not confident that the current rally is sustainable despite some short-covering activity.

Huobi Top Trader Long/Short. Source: Huobi

The long-to-short ratio had been relatively neutral until October 21. Suddenly, top traders decided to short as BTC broke the $12.5K resistance. This morning, as BTC refused to lose ground, those traders started to cover their shorts.

Still, at the moment, there are no signs of bullish bets as Huobi’s latest data favoring longs by 10% occurred over two weeks ago.

OKEx Long/Short ratio. Source: OKEx

As for OKEx top traders, a similar pattern emerged, although the shorting movement happened ahead of $12K. This indicator remains in favor of shorts, a trend that emerged in mid-September and has been held since then.

To confirm whether there has been a change in sentiment, one should monitor the futures contracts premium. Those contracts usually trade with a slight premium on healthy markets across any asset class.

Bullish markets will cause futures contract sellers to demand a higher price to postpone settlement instead of making the sale at regular spot markets. If the current $13K level has managed to restore bullish momentum, this should be reflected in this indicator.

January futures contracts premium. Source: Digital Assets Data

As Cointelegraph and Digital Assets Data show, the current 1.8% premium matches the same level seen three weeks ago as BTC hovered around $11.5K. This data is further evidence that top traders are not confident in buying BTC despite the 13% price increase since then.