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$29K Bitcoin is closer than you think, according to derivatives data

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Bitcoin (BTC) price continues to struggle at the $24,000 resistance and the price was rejected there on August 10, but the rejection was not enough to knock the price down from the 52-day ascending channel. The channel has support at $22,500 and this bullish formation suggests that the price of BTC will eventually reach the $29,000 level in early October.

12-hour Bitcoin/USD price. Source: Trading View

The Bitcoin derivatives data shows a lack of interest from leveraged longs (bulls), but at the same time it does not price the higher chances of a surprise crash. Curiously, Bitcoin’s latest downturn on August 9 was accompanied by a negative performance of US-listed stocks.

On August 8, video chipset and graphics card maker Nvidia Corp (NVDA) announced that its Q2 sales would be down 19% from the previous quarter. Additionally, the US Senate passed a bill on August 6 that could negatively impact corporate earnings. Despite freeing up $430 billion to fund “climate, health and taxes,” the provision would impose a 1% tax on share buybacks by publicly traded companies.

The high correlation of traditional assets with cryptocurrencies remains a huge concern for some investors. Investors shouldn’t get carried away even if inflationary pressures ease, as the US Fed is watching jobs data very closely. The latest reading showed an unemployment rate of 3.5%, typical of overheated markets, forcing the monetary authority to continue raising interest rates and cancel stimulus debt-purchase programs.

Reducing risk positions should be the norm until investors clearly signal that the US central bank is about to ease tighter monetary policies. This is precisely why crypto traders follow macro numbers so closely.

Currently, Bitcoin lacks the strength to break through the $24,000 resistance, but traders should study derivatives to gauge professional investor sentiment.

Bitcoin derivatives metrics are neutral to bearish

The annualized Bitcoin futures premium measures the difference between longer-term futures contracts and current spot market levels. The indicator should be between 4% and 8% to compensate traders who “lock in” the money until the contract expires. Thus, levels below 2% are extremely bearish, while figures above 10% indicate excessive optimism.

Annualized 3-month Bitcoin futures premium. Source: Laevitas

The chart above shows that this metric fell below 4% on June 1, reflecting traders’ lack of demand for leveraged long (bullish) positions. However, the current reading of 2% is not particularly concerning, given that BTC is down 51% year-to-date.

To rule out futures-specific externalities, traders should also analyze Bitcoin options markets. The 25% delta skew is a telltale sign whenever arbitrage desks and market makers overcharge for upside or downside protection.

Related: Bitcoin Price Hits $24,000, Ethereum Hits 2-Month High as US Inflation Declines

If these traders fear a Bitcoin price crash, the asymmetry indicator will move above 12%. In contrast, generalized excitement reflects a negative bias of 12%.

Bitcoin options 30 days 25% delta skew: Source: Laevitas

The data shows that the bias indicator has been hovering between 3% and 5% since August 5, which is considered a neutral zone. Options traders are no longer overcharging for downside protection, which means they might run out of excitement, but at least they’ve given up on the feeling of “fear” seen in recent months.

Given Bitcoin’s current ascending channel pattern, Bitcoin investors probably shouldn’t worry too much about the lack of buying demand, according to futures market data.

Of course, there is a healthy skepticism reflected in the derivatives metrics, but the path to a BTC price of $29,000 remains clear as long as inflation and employment statistics are in check.

The views and opinions expressed herein 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