Bitcoin derivatives data reflects traders’ belief that $20K will become support

cointelegraph.com:

Bitcoin (BTC) showed strength on Oct. 4 and 5, posting a 5% gain on Oct. 5 and breaking through the $20,000 resistance. The move liquidated $75 million worth of leverage short (bear) positions and it led some traders to predict a potential rally to $28,000.

$BTC #Bitcoin Shared this descending channel 2 days ago.$BTC has managed to break through the middle line.Next target = Upper channel trendline = ~21.5k.In case of a breakout, 28k-30k are possible. pic.twitter.com/dyqMLdcXZ4

As described by @el_crypto_prof, the descending channel continues to exert its pressure, but there could be enough strength to test the upper channel trendline at $21,500. The price action coincided with improving conditions for global equity markets on Oct. 4, as the S&P 500 index gained 3.1% and the tech-heavy Nasdaq Composite rallied 3.3%.

Curiously, the sentiment improvement happened while the United States job openings dropped by 1.1 million in August, according to the U.S. Labor Department. The decline was the largest since April 2020 and signaled the U.S. Federal Reserve's aggressive contractive monetary policy could end sooner than expected.

The overall bullish sentiment might have caused Bitcoin to break the $20,000 resistance, but that does not mean professional investors are comfortable at the current price levels.

Monitoring margin and options markets provides excellent insight into how professional traders are positioned. Margin trading allows investors to borrow cryptocurrency to leverage their trading position. For example, one can increase exposure by borrowing stablecoins to buy an additional Bitcoin position.

On the other hand, Bitcoin borrowers can only short the cryptocurrency as they bet on its price declining. However, unlike