From cointelegraph by Marcel Pechman
Bitcoin BTC$99,702 experienced unprecedented intraday volatility on Dec. 5, with a dramatic $12,396 price swing that saw the cryptocurrency reach a remarkable low of $91,463. Analysts estimate that over $4 billion worth of leveraged BTC futures were liquidated during this period, surpassing the previous peak recorded during FTX's bankruptcy in November 2022.
What truly stood out during the Dec. 5 flash crash was the $5,160 rebound in less than 15 minutes after hitting the low, as buyers aggressively defended the $96,500 support level. Moreover, Bitcoin derivatives metrics maintained their prior bullishness, signaling that traders remain confident in the ongoing upward momentum.
To gauge market sentiment, analyzing Bitcoin’s margin markets is crucial. Unlike derivatives contracts, which require both buyers and sellers, margin markets enable traders to borrow stablecoins to purchase spot Bitcoin or borrow BTC to initiate short positions, wagering on a price decline.
Bitcoin margin long-to-short ratio at OKX. Source: OKX
The Bitcoin long-to-short margin ratio at OKX currently stands at 20x in favor of long (buy) positions. Historically, excessive confidence pushes this ratio above 40x, while levels below 5x favoring longs are generally interpreted as bearish.
To determine whether large investors or "whales," have shifted sentiment following the rejection at the $103,500 level, data from BTC futures markets is critical. The top traders' long-to-short ratio consolidates positions across spot, perpetual, and monthly futures contracts. A higher ratio indicates a preference for long positions, while a lower ratio suggests professional traders are leaning toward short (sell) contracts.
Top traders Bitcoin long-to-short ratio. Source: CoinGlass
At Binance, the long-to-short ratio currently stands at 1.65, matching levels from two days ago and exceeding the two-week average of 1.52, favoring long positions. Similarly, OKX top traders have turned more bullish, with their long-to-short ratio rising from 1.15 to 1.37 over the same period. These metrics at both Binance and OKX reflect a clear tilt toward bullish bets in absolute terms.