For novice traders, FOMO can be a heavy burden to bear. Resisting the urge to buy Bitcoin (BTC) later on a nearly 15% rally, which saw the price break both the $12K and $13K levels in less than 24 hours, is near incommunicable.

Professional person traders are more experienced and know precisely how to play these FOMO-inducing situations. As data has shown, they were by and large adding shorts up to Oct twenty, correct earlier the $12K rupture.

BTC futures amass liquidations. Source: Coinalyze.cyberspace

Most investors neglect to grasp that existence a pro trader does non mean all the emerging trends are played profitably. Instead, surviving when things become incorrect is the truthful mark of success.

As BTC rocketed to $xiii,217, a full of $350 1000000 worth of liquidations occurred, and the futures contract funding rate shows in that location was not excessive short leverage.

Perpetual contracts, too known as inverse swaps, have an embed charge per unit usually charged every eight hours. When shorts are the ones demanding more leverage, the funding rate goes negative. Therefore, those shorts will be the ones paying upward the fees.

BTC perpetual contracts funding rate. Source: Digital Assets Data

The above chart shows that such a situation hasn't occurred over the past few weeks, at to the lowest degree not in a significant way. Thus, despite selling alee of the price surge, top traders were not squeezed out of leveraged brusque positions.

Data bear witness pro traders covered their shorts on Oct. 21 and they remain distanced from placing bullish bets. This action is supported both by crypto exchanges superlative traders long-to-curt ratio and the futures contracts premium.

Pro traders covered shorts but are unwilling to go long

According to Huobi's long-to-short ratio, there has been no sign of aggressive buying. Data indicates that top traders are not confident that the current rally is sustainable despite some short-roofing activity.

Huobi Top Trader Long/Short. Source: Huobi

The long-to-short ratio had been relatively neutral until October 21. Suddenly, top traders decided to short as BTC bankrupt the $12.5K resistance. This morning, as BTC refused to lose ground, those traders started to cover their shorts.

However, at the moment, there are no signs of bullish bets as Huobi's latest data favoring longs by 10% occurred over two weeks ago.

OKEx Long/Curt ratio. Source: OKEx

As for OKEx top traders, a similar design emerged, although the shorting movement happened ahead of $12K. This indicator remains in favor of shorts, a tendency that emerged in mid-September and has been held since then.

To ostend whether there has been a change in sentiment, ane should monitor the futures contracts premium. Those contracts usually trade with a slight premium on healthy markets across whatsoever asset class.

Bullish markets will crusade futures contract sellers to need a higher price to postpone settlement instead of making the sale at regular spot markets. If the electric current $13K level has managed to restore bullish momentum, this should exist reflected in this indicator.

Jan futures contracts premium. Source: Digital Avails Data

As Cointelegraph and Digital Assets Data bear witness, the current 1.8% premium matches the same level seen three weeks ago as BTC hovered around $xi.5K. This data is farther evidence that top traders are non confident in buying BTC despite the 13% cost increase since and so.

Options markets faced turbulent winds

Implied volatility is the master metric that can be extracted from options pricing. Whenever traders perceive an increased risk of larger cost oscillations, the indicator will shift college. The reverse occurs during periods when the price is flat or the expectation of balmy price swings.

Bitcoin three-calendar month options implied volatility. Source: Skew

Bitcoin's unsaid volatility had been in a downtrend during the past six weeks, simply yesterday's move seems to have surprised options traders. Not only did the indicator spike from 55% to lxx%, the volume traded on options contracts ($575 million) was three times higher than boilerplate.

The sudden volatility fasten and the consistent partial retrace to the current 64% level bespeak that some traders were sick-positioned and had to shut their positions abruptly.

According to the Blackness-Scholes model, a 15% implied volatility movement causes a $14K Dec call choice cost to move xl%. This change shows that events like yesterday'south are sensitive to leveraged traders, equally whatsoever leverage to a higher place 3x would have been liquidated.

Going by the long-to-short ratio and futures contracts premium, in that location is hardly whatever relevant ownership activeness from pinnacle traders. This lack of interest raises a yellow flag as on-concatenation data shows that as the Bitcoin price surged above $13,000, a record-high 22% of the total BTC supply was transacted.

This movement could exist a potential signal of large entities preparing to sell. Still, ane must recollect that unless those BTC are transferred to exchanges, over-the-counter (OTC) deals tend to have less cost impact.

The views and opinions expressed here are solely those of the autho r and exercise not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own inquiry when making a decision.