The current configuration of Bitcoin presents an intriguing risk-reward scenario for bulls

Bulls are hoping for a turnaround after a slight boost in stock markets and the resiliency of a few key BTC price indicators. The Bitcoin (BTC) chart has formed a symmetrical triangle, which is presently contained within a tight range starting at $28,900 and ending at $30,900. This pattern has been in place for almost two weeks now and might continue for another two weeks if prices move more quickly.

A symmetrical triangle is either bullish or bearish, depending on the context. In that regard, the price approaches a number of lower peaks and higher valleys. The support/resistance breakthrough is when the market decides on a new trend; this is known as the decisive turning point. As a result, the price may break out in either direction.

According to Bitcoin derivatives data, traders are pricing a higher chance of a downturn, but recent improvements in the global economic climate might take the bears by surprise.

On May 23, crypto markets rose on the back of improving macroeconomic conditions driven by the United States, according to Cointelegraph. On the market’s opening, United States President Joe Biden unveiled plans to cut trade tariffs with China, giving investors a boost.

According to on-chain analytics platform Glassnode, miners are not exhibiting signs of surrender even though their wallets’ movements to exchanges hit a 30-day low on May 23.

Traders should keep an eye on traders’ sentiment and transactions, as well as how big whales and market indicators are positioned in the futures and options markets.

Traders in retail typically avoid quarterly futures due to their fixed settlement date and price discrepancy from spot markets. The contracts’ main benefit, however, is the lack of a fluctuating funding rate; as a result, arbitrage desks and professional traders are common.

In some cases, fixed-month contracts are priced higher than spot markets because sellers ask for extra money to hold settlement. This is referred on as “contango,” and it isn’t limited to cryptocurrency trades. In healthy surroundings, futures should trade at a 5% to 15 percent annual premium.

Bitcoin 3-month futures’ annualized premium. Source: Laevitas

Traders must also evaluate Bitcoin options markets in order to eliminate externalities specific to the futures instrument. The 25 percent delta skew is especially useful since it can reveal when Bitcoin arbitrage desks and market makers are charging too much for upside or downside protection.

If option investors are concerned about a Bitcoin price collapse, the skew indicator will rise above 12%. On the other hand, a negative 12% skew indicates generalized excitement.

Bitcoin 30-day options 25% delta skew: Source: Laevitas

On May 9, the skew indicator broke above 12% for the first time since April 13, finding a level of “fear” among options traders who had purchased protection on the downside. Furthermore, for the metric, the most recent 25.4 percent was its all-time peak.

In a nutshell, BTC option markets are still turbulent, suggesting that professional traders are hesitant to take risk on the downside. The futures premium for Bitcoin has remained somewhat stable, but leveraged long investors appear to be ignoring the indicator. Taking a bullish position might seem counterintuitive right now, but an unexpected price rise would overwhelm skilled traders. As a result, it presents a fascinating opportunity for Bitcoin bulls.

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