$16K retest the most likely path for Bitcoin, according to 2 derivative metrics

Bitcoin (BTC) broke beneath $16,800 connected Dec. 16, reaching its lowest level successful much than 2 weeks. More importantly, the question was a implicit turnaround from the momentary excitement that had led to the $18,370 highest connected Dec. 14.

Curiously, Bitcoin dropped 3.8% successful 7 days, compared to the S&P 500 Index's 3.5% diminution successful the aforesaid period. So from 1 side, Bitcoin bulls person immoderate comfortableness successful knowing that correlation played a cardinal role; astatine the aforesaid time, however, it got $206 cardinal of BTC futures contracts liquidated connected Dec. 15.

Some troublesome economical information from the car indebtedness manufacture has made investors uncomfortable arsenic the complaint of defaults from the lowest-income consumers present exceeds 2019 levels. Concerns emerged aft the mean monthly outgo for a caller car reached $718, a 26% summation successful 3 years.

Furthermore, alongside the Bank of England, 2 cardinal banks accrued involvement rates by 50 ground points to multiyear peaks — highlighting that borrowing costs would apt proceed rising for longer than the marketplace had hoped.

Uncertainty successful cryptocurrency markets reemerged aft 2 of the astir salient auditors abruptly dropped their services, leaving exchanges hanging. For instance, the website of the French auditing steadfast Mazars Group is offline. The steadfast antecedently worked with respective exchanges, including Binance, KuCoin and Crypto.com.

Meanwhile, accounting steadfast Armanino has besides reportedly ended its crypto auditing services. The auditor worked with respective crypto trading platforms similar OKX, Gate.io and the troubled FTX exchange. Curiously, Armanino was the archetypal accounting steadfast to found relationships successful the crypto industry, dating backmost to 2014.

Let's look astatine derivatives metrics to amended recognize however nonrecreational traders are positioned successful the existent marketplace conditions.

The Asia-based stablecoin premium drops to 2-month low

The USD Coin (USDC) premium is simply a bully gauge of China-based crypto retail trader demand. It measures the quality betwixt China-based peer-to-peer trades and the United States dollar.

Excessive buying request tends to unit the indicator supra just worth astatine 100%, and during bearish markets, the stablecoin's marketplace connection is flooded, causing a 4% oregon higher discount.

USDC peer-to-peer vs. USD/CNY. Source: OKX

Currently, the USDC premium stands astatine 101.8%, up from 99% connected Dec. 12, indicating higher request for stablecoin buying from Asian investors. The information gained relevance aft the brutal 9.7% correction successful 5 days since the $18,370 highest connected Dec. 14.

However, this indicator should not needfully beryllium viewed arsenic bullish due to the fact that the stablecoin could person been acquired to support from downside risks successful cryptocurrencies — meaning investors are becoming much bearish.

Leverage buyers dilatory thrown successful the towel

The long-to-short metric excludes externalities that mightiness person solely impacted the stablecoin market. It besides gathers information from speech clients' positions connected the spot, perpetual, and quarterly futures contracts, frankincense offering amended accusation connected however nonrecreational traders are positioned.

There are occasional methodological discrepancies betwixt antithetic exchanges, truthful readers should show changes alternatively of implicit figures.

Exchanges' apical traders Bitcoin long-to-short ratio. Source: Coinglass

As Bitcoin broke beneath the $16,800 support, nonrecreational traders decreased their leverage agelong positions according to the long-to-short indicator.

For instance, the ratio for Binance traders somewhat declined from 1.11 connected Dec. 14 to the existent 1.04 level. Meanwhile, Huobi displayed a humble alteration successful its long-to-short ratio, with the indicator moving from 1.01 to 0.05 successful the aforesaid period.

Lastly, astatine the OKX exchange, the metric decreased from 1.00 connected Dec. 14 to the existent 0.98 ratio. So, connected average, traders person decreased their leverage-long ratio implicit the past 5 days, indicating lesser assurance successful the market.

A imaginable retest of $16,000 is apt successful the making

The mean 101.8% stablecoin premium successful Asia, paired with the accusation of apical traders' long-to-short indicator decline, tells a communicative of buyers gradually ceding to pessimism.

Furthermore, the $206 cardinal liquidation successful agelong BTC futures contracts signals that buyers proceed to usage excessive leverage, mounting up the cleanable tempest for different limb of correction.

For now, the Bitcoin terms continues to beryllium heavy babelike connected accepted banal markets. Still, anemic macroeconomic information and the uncertainty brought by crypto auditing firms constituent to higher likelihood of a $16,000 Bitcoin retest.

The views, thoughts and opinions expressed present are the authors’ unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.