Bitcoin derivatives favor further BTC price rally toward $30K

Despite regulatory pressure and worsening macroeconomic conditions, Bitcoin (BTC) demonstrated bullishness holding near $28,000 for the past week. Furthermore, professional traders have maintained leveraged long positions on margin and in futures markets, indicating strength.

On the regulatory front, on April 4, the Texas Senate Committee on Business and Commerce agreed to move forward and remove incentives for miners operating within the state’s regulatory environment. If passed, Senate Bill 1751 would set a cap on compensation for load reductions on Texas’ power grid during emergencies.

Risk of recession grows against rate hikes 

The risk of a recession grew after applications for U.S. unemployment benefits for the week ending March 25 were revised to 246,000, up 48,000 from the initial report.

Furthermore, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), stated on April 6 that economies in the U.S. and Europe should continue to struggle as higher interest rates weigh on demand.

Regarding the banking crisis, Georgieva advised central banks to keep raising interest rates, adding, “concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks — now is not the time for complacency.”

On the other hand, on April 6, St. Louis Federal Reserve President James Bullard downplayed concerns about the impact of financial stress on the economy. Bullard stated that the Fed’s reaction to the banking sector’s weakness was “swift and appropriate,” and that “monetary policy can continue to put downward pressure on inflation.”

Let’s look at derivatives’ metrics to better understand how professional traders are positioned in the current market conditions.

BTC price derivatives reflect traders’ neutral sentiment

Margin markets provide insight into how professional traders are positioned because they allow investors to borrow cryptocurrency to leverage their positions.

For example, one can increase exposure by borrowing stablecoins and buying Bitcoin. On the other hand, borrowers of Bitcoin can only take short bets against BTC/USD.

The chart above shows that OKX traders’ margin lending ratio has remained near 28x in favor of BTC longs over the last week. If those whales and market makers had perceived increased risks of a price correction, they would have borrowed Bitcoin for shorting, causing the indicator to fall below 20x.

The top traders’ long-to-short net…