Here’s why the bulls aren’t buying the Bitcoin price drop to $ 50,000

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Bitcoin (BTC) has rebounded to support of $ 51,000 in the past 44 days. Typically, this would be interpreted as a positive event, especially since the $ 50,000 level represents a 75% lead in 2021.

However, cryptocurrency investors are generally short-term focused and always overly optimistic. So, Bitcoin’s current narrative is slowly turning bearish, but other than sentiment, what story are the fundamentals telling?

However, it is possible that the recent drop has its roots in the expiration of the $ 1.55 billion options scheduled for April 23. As previously reported by TBEN, bears have an advantage of $ 340 million below $ 57,000. It could also explain why professional traders have kept a neutral position despite falling 18% over the past eight days.

Bitcoin price at Coinbase, USD. Source: TradingView

On the other hand, some analysts such as Willy Woo have said that the Chinese coal mining accident caused Bitcoin’s hashrate to drop sharply. This event, added to the blackout in China’s Xinjiang region, may have reduced the processing power of the Bitcoin network by 19% and highlighted its heavy reliance on power from the coal.

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As critics have rushed to denigrate Bitcoin, Coin Metrics co-founder Nic Carter has produced a well-documented rebuttal to some of the main allegations. Carter points out that Bitcoin mining, which is relatively portable, is concentrated in areas where electricity is unused and cheap.

Additionally, while the gold industry is destructive to the environment and dependent on diesel power, Bitcoin mining can be powered entirely by clean energy. Unlike precious metals, the portability of Bitcoin miners allows the use of previously wasted oil and gas resources.

Regardless, professional traders did not add positions during the recent BTC price correction.

Professional traders do not sell nor do they buy at any price point.

The major cryptocurrency exchanges provide data on the net long-short positioning of their major traders. This indicator is calculated by analyzing the consolidated positions of clients on spot, margin and futures. By doing this, it provides a clearer view of the upward or downward trend of professional traders.

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It’s important to note that there are occasional methodological discrepancies between different exchanges, so watch for changes rather than absolute numbers.

Long / short ratio of the best traders on the Bitcoin exchange. Source: Bybt

The chart above shows that the top traders increased their exposure between April 14 and April 17, while the price of Bitcoin was above $ 60,000. In contrast, over the past five days, these whale and arbitration offices have remained relatively stable.

It should be noted that the current ratio of 1.49 favoring buyers on OKEx remains below the level of 1.75 seen on April 17. This data indicates that the best traders have reduced their positions in the last five days.

A similar trend took place at Binance, where the net long / short ratio of top traders peaked at 1.25 on April 17. Although slightly favorable to buyers, the current indicator of 1.18 is in the lower range of the past three weeks.

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Finally, Huobi’s top traders added long positions between April 14 and April 18, but they maintained a stable ratio of 0.90.

Therefore, there is no doubt that the whales and referees are not adding to their long positions even as BTC tests the $ 52,000 support with a 20% correction from the April 14 high.

However, investors are encouraged to wait until options expire on Friday before jumping to quick conclusions.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TBEN. Every investment and trading move involves risk. You need to do your own research when making a decision.