Looking at the Bitcoin (BTC) chart from a weekly or daily perspective presents a bearish outlook, and it'south clear that BTC's price has been consistently making lower lows since hitting an all-time high at $69,000.

BTC/USD on FTX. Source: TradingView

Curiously, the Nov. 10 toll peak happened right as the United States announced that inflation had hit a 30-twelvemonth high, but the mood quickly reversed afterward fears related to Cathay-based real estate developer Evergrande defaulting on its loans. This appears to take impacted the broader marketplace structure.

Traders are yet agape of stablecoin regulation

This initial cosmetic phase was quickly followed past relentless pressure from regulators and policymakers on stablecoin issuers. Kickoff came VanEck's spot Bitcoin exchange-traded fund rejection by the U.S. Securities and Exchange Commission on Nov. 12. The denial was direct related to the views that Tether'southward stablecoin, USDT, was insolvent and concerns over Bitcoin'southward cost manipulation.

On Dec. 14, the U.S. Senate Banking, Housing and Urban Affairs Committee held a hearing on stablecoins focused on consumer protection and their risks, and on Dec. 17, the U.S. Financial Stability Oversight Council voiced its business organization over stablecoin adoption and other digital avails. "The Council recommends that country and federal regulators review bachelor regulations and tools that could be practical to digital assets," said the report.

The worsening mood from investors was reflected in the CME's Bitcoin futures contracts premium. The metric measures the difference between longer-term futures contracts to the current spot price in regular markets.

Whenever this indicator fades or turns negative, this is an alarming red flag. This state of affairs is also known equally backwardation and indicates that bearish sentiment is nowadays.

BTC CME 2-month forward contract premium vs. Coinbase/USD. Source: TradingView

These fixed-month contracts ordinarily trade at a slight premium, indicating that sellers are requesting more money to withhold settlement for longer. Futures should trade at a 0.5%–2% annualized premium in healthy markets, a state of affairs known as contango.

Detect how the indicator moved below the "neutral" range afterwards Dec. 9 as Bitcoin traded below $49,000. This shows that institutional traders are displaying a lack of confidence, although information technology is not nonetheless a bearish structure.

Top traders are increasing their bullish bets

Exchange-provided data highlights traders' long-to-short net positioning. By analyzing every customer'southward position on the spot, perpetual and futures contracts, one tin better understand whether professional traders are leaning bullish or surly.

At that place are occasional discrepancies in the methodologies between different exchanges, and so viewers should monitor changes instead of absolute figures.

Exchanges top traders Bitcoin long-to-brusque ratio. Source: Coinglass

Despite Bitcoin's nineteen% correction since Dec. 3, acme traders on Binance, Huobi and OKEx accept increased their leverage longs. To be more than precise, Binance was the simply exchange facing a pocket-sized reduction in the top traders' long-to-short ratio. The figure moved from one.09 to i.03. Notwithstanding, this impact was more than compensated by OKEx traders increasing their bullish bets from 1.51 to two.91 in two weeks.

Related: SEC commissioner Elad Roisman will go out by end of January

The lack of a premium in CME two-month time to come contracts should not be considered a "ruby alert" because Bitcoin is currently testing the $46,000 resistance, its lowest daily close since Oct. 1. Furthermore, top traders on derivatives exchanges have increased their longs despite the price drop.

Regulatory force per unit area probably won't elevator up in the curt term, but at the same time, there'due south not much that the U.S. government can practise to suppress stablecoin issuance and transactions. These companies can movement outside of the U.Due south. and operate using dollar-denominated bonds and assets instead of cash. For this reason, currently, there is hardly a sense of panic nowadays in the marketplace, and according to the information, pro traders are ownership the dip.

The views and opinions expressed here are solely those of the author and practice not necessarily reverberate the views of Cointelegraph. Every investment and trading movement involves risk. You should conduct your own research when making a decision.