Bitcoin's (BTC) severe 26% driblet from its $58,300 all-fourth dimension high on Feb. 20 injected a bit of bearishness into the market, but from a technical perspective, this was purely psychological, equally the digital nugget held the $43,000 support with ease. This downside movement caused indicators similar the Crypto Fear & Greed Index to striking 38, its lowest level in five months.

Bitcoin price in U.S. dollars on Coinbase. Source: TradingView

Even though a $15,400 downside motility might seem unusual, 25% and fifty-fifty larger corrections happened on six separate occasions during the 2017 balderdash run. Moreover, when BTC first made an all-time high at $42,000 on January. 8, a 31.5% negative swing to $28,750 happened in the following two weeks.

As Bitcoin tried to establish a lesser, derivatives contracts eliminated any bullish signal and momentarily displayed worrisome information. For example, the open interest on futures dropped 22% after peaking at $xix.1 billion on Feb. 21.

Bitcoin futures amass open interest. Source: Bybt

As depicted to a higher place, considering the end-of-calendar month expiry touch, BTC futures open interest fell by 22%. Admitting significant, the remaining $14.ix billion is still 44% higher up the previous calendar month's data.

Derivatives indicators held steady, indicating a healthy marketplace

By measuring the futures contracts premium to the current spot levels, one tin can infer whether professional traders are leaning bullish or bearish. Typically, markets should brandish a slightly positive annualized rate, a situation known as "contango."

Bitcoin 1-month futures annualized premium. Source: TradingView

Although the ane-calendar month futures contracts premium toned down from the ultra-bullish vi% charge per unit seen mid-February, it did manage to sustain levels to a higher place i.two%. The annualized equivalent is a 70% peak compared with the current 17% rate. Therefore, the futures contracts premium indicates that any excessive leverage from buyers has been eliminated, but nosotros are nowhere near a carry market.

Meanwhile, the BTC options markets 25% delta skew measures how the neutral-to-bullish calls are priced compared with equivalent bearish puts.

Bitcoin 1-month options 25% delta skew. Source: laevitas.ch

The indicator acts equally an options traders' fear and greed approximate and was sitting at -5% until Feb. 21, meaning protection to the upside was more expensive. Over the by week, the 25% delta skew moved to a neutral zone that was final seen almost five months agone.

This further confirms the absence of desperation from market makers and top traders while shredding signs of the excessive optimism seen in January.

The absenteeism of bearishness during a crash is a skilful signal

Every bit institutional investors continue to flock to the infinite, Bitcoin's volatility tends to accept a lessened impact on derivatives markets. To illustrate this new state of affairs, both BTC futures and options markets indicators were far from flashing any ruby-red flags despite the 26% cost drop.

Bitcoin'due south positive newsflow and institutional investors interest is likely unharmed afterwards the most recent retest of $43,000. Thus, every bit companies and common funds accumulate Bitcoin, instead of framing dips equally catastrophic, these moves should be interpreted as ownership opportunities.

The views and opinions expressed here are solely those of the autho r and practice not necessarily reverberate the views of Cointelegraph. Every investment and trading move involves risk. You should bear your ain inquiry when making a decision.