Introduction
Bitcoin has been going through a period of consolidation in recent weeks, with the cryptocurrency hovering around the $30,000 mark. Despite this, derivatives data suggests that BTC is holding its current range.
Derivatives Data Supports Stability
According to data from Skew, the leading provider of institutional-grade cryptocurrency derivatives data, Bitcoin’s implied volatility has been declining. This suggests that traders are becoming more comfortable with the current price range of the cryptocurrency.
In addition, the funding rate for perpetual swaps, which are a type of derivative contract, has been hovering around zero. This indicates that there is no significant bias towards long or short positions, which further supports the stability of Bitcoin’s price.
Institutional Investors Remain Bullish
Despite the recent volatility in the cryptocurrency market, institutional investors continue to be bullish on Bitcoin. In fact, many institutions have been increasing their exposure to the cryptocurrency in recent months.
For example, MicroStrategy, a business intelligence firm, has been steadily accumulating Bitcoin since August 2020. The company currently holds over 100,000 BTC, which is worth over $3 billion at current prices.
Similarly, Grayscale Investments, a digital asset management firm, has been buying Bitcoin at an accelerated pace. The firm’s Bitcoin Trust now holds over 650,000 BTC, which is worth over $20 billion.
Bitcoin’s Future Outlook
While it is difficult to predict the future price of Bitcoin, the current stability of the cryptocurrency suggests that it may continue to hold its current range in the short term. However, as institutional adoption of Bitcoin continues to grow, there is a possibility that the cryptocurrency’s price may rise in the long term.
Related:Bitcoin Lightning Bring Global Payments from Fax Era: Former PayPal President
Conclusion
Bitcoin’s recent period of consolidation has not deterred institutional investors from continuing to be bullish on the cryptocurrency. With derivatives data supporting the stability of Bitcoin’s price, it is possible that the cryptocurrency may continue to hold its current range in the short term. However, as institutional adoption of Bitcoin continues to grow, there is a possibility that the cryptocurrency’s price may rise in the long term.
