Apart from a brief $18,100 examination on Dec. one, Bitcoin (BTC) markets remained relatively calm over the week. This suggests that investors are first to realize that a more extended catamenia of consolidation could be possible later on a 77% hike since Oct.

BTC/USD iv-hour chart. Source: TradingView

Whenever the Bitcoin price stabilizes, there is e'er an increased expectation of an altcoin rally. That hasn't been the case recently, as BTC say-so increased past 0.8% to 63.half dozen% this week.

This motility signals that investors are either waiting for a $xx,000 resistance interruption or fearing a potential negative price swing. Thus, such a move indicates that their confidence in altcoins has diminished.

Meridian-16 cryptocurrencies weekly performance. Source: Nomics & CoinMarketCap

The higher up chart shows how Bitcoin has managed to gain market share this week. Apart from Nem (XEM), the remaining altcoins moved upward 0.5%. Volumes accept been disappointing overall, although this tin can partially be explained by BTC accumulation at the $19,200 level.

Whenever traders are undecided, they reduce positions and look for better entry points. Therefore, this week'due south book drop has been an aligning rather than a lack of interest.

Institutional investors accrue while Bitcoin price consolidates

Crypto fund manager Grayscale Investments continued to aggressively add BTC to their portfolio, surpassing the $10 billion mark.

Grayscale Investments BTC holdings. Source: bybt.com

Over the past calendar week, almost 13,000 BTC have been added, totaling 547,000. Therefore, it was another groovy week for Grayscale Bitcoin Trust. Like excitement tin be seen by analyzing its premium over the effective BTC held by each share, currently at 0.00095153 BTC.

Grayscale Bitcoin Trust premium. Source: TradingView & Grayscale

Equally depicted above, the premium increased to 22% from eleven% the previous calendar week. The indicator maintained a fourteen% premium boilerplate over the past ninety days. Therefore it reflects positive momentum as it recently marked a six-month loftier.

Perpetual futures funding held steady

Perpetual contracts, also known as changed swaps, have an embedded charge per unit ordinarily charged every eight hours. Funding rates ensure at that place are no substitution chance imbalances. Fifty-fifty though both buyers and sellers' open interest is matched at all times, the leverage can vary.

When buyers (longs) are the ones demanding more leverage, the funding rate turns positive. Therefore, the buyers volition be the ones paying upwardly the fees. This event holds especially true during bull runs, when there is usually more demand for longs.

Sustainable rates to a higher place two% per week translate to extreme optimism. This level is acceptable during market rallies but problematic if the BTC price is sideways or in a downtrend.

In situations like these, high leverage from buyers increases the potential for big liquidations during surprise cost drops.

BTC perpetual futures funding rates. Source: Digital Assets Data

Take notice how, despite Bitcon'southward stagnate price, the weekly funding rate managed to sustain a good for you level. This information indicates that traders remain optimistic, although they are far from being overleveraged.

A cursory moment of excitement was also seen in the early hours of December. 1 when BTC tested the $19,900 level.

Futures premium peaked but has since normalized

The funding rate might bring some distortions as it'due south the preferred instrument of retail traders and, as a result, is impacted by excessive leverage. On the other hand, professional traders tend to dominate longer-term futures contracts with set expiry dates.

By measuring how much more expensive futures are versus the regular spot market, a trader can judge their bullishness level. The stock-still-calendar futures should usually trade with a 0.v% or higher premium versus regular spot exchanges.

Whenever this indicator fades or turns negative, this is an alarming red flag. Such a situation, also known as backwardation, indicates that the marketplace is turning bearish.

January. 2021 BTC futures premium. Source: Digital Assets Data

The higher up nautical chart shows that the indicator briefly touched 2% on December. 1 but afterward adjusted to 0.9% as Bitcoin failed to break the $20,000 resistance. Regardless of the drop, information technology has held above the minimum 0.5% threshold, indicating optimism from professional person traders.

Options put/call ratio

By measuring whether more activeness is going through call (buy) options or put (sell) options, one tin can gauge the overall market place sentiment. Generally speaking, call options are used for bullish strategies, whereas put options for bearish ones.

A 0.70 put-to-call ratio indicates that put options open up interest lag the more bullish calls past thirty% and is therefore bullish.

In contrast, a i.20 indicator favors put options by 20%, which can be deemed bearish. One thing to note is that the metric aggregates the entire BTC options market place, including all calendar months.

BTC options put-to-call ratio. Source: Cryptorank.io

Equally Bitcoin price approaches $20,000, it's simply natural for investors to seek downside protection. Equally a event, the put-to-telephone call ratio peaked at 0.70 on December. 2. Albeit the increase, it was all the same favoring the more bullish telephone call options by 30%.

Afterward this excitement period, the indicator has moved back to a healthy 0.63. Because that 0.67 has been the boilerplate for the by iii months, information technology should be deemed bullish equally fewer investors are buying protective put options.

Bitcoin price is flat, merely investors remain bullish

Overall, each of the key indicators discussed in a higher place accept held steady within their expected range, especially because the market recently pulled back to $18,100.

As BTC holds in a higher place $19,000, investors may begin to 2nd-gauge the odds of creating a new all-time loftier, and some will probably blitz to accept profits.

At the moment, there has not been an indicator that is ringing the alarm bong. The overall bullishness remains, although the absence of an altcoin rally during BTC's catamenia of consolidation may damper investors' mood.

The views and opinions expressed hither are solely those of the autho r and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves run a risk. You should carry your own enquiry when making a decision.