Cryptocurrency markets rallied 12.v% over the past vii days to achieve a $2.44 trillion market capitalization. Still, that move doesn't seem to be inspiring confidence because the same level was tested xvi days agone when a 27% retrace followed Ether'due south (ETH) attempt to pause $iii,650 over the adjacent half dozen days.

Regulation seems to be a key concerning gene for buyers as the Us House of Representatives is expected to vote on the $1 trillion infrastructure beak this month. In improver to defining who qualifies as a broker, the legislation would impose anti-money laundering (AML) and know-your-customer (KYC) blazon requirements on many kinds of cryptocurrency transactions, which could besides be detrimental for DeFi protocols.

Height 8 cryptos 7-and xxx-twenty-four hour period performances. Source: CoinMarketCap

Equally shown higher up, the negative functioning seen in the superlative x cryptocurrencies has impacted investor sentiment over the past thirty days. For this reason, it'due south important to measure more than than just Bitcoin'southward (BTC) nominal cost. Traders should also analyze Bitcoin'due south derivatives indicators similar the futures markets premium and options skew.

The futures premium shows traders are slightly bullish

The ground charge per unit is also oftentimes referred to as the futures premium and it measures the difference between longer-term futures contracts and the electric current spot market levels.

A 5% to 15% annualized premium is expected in salubrious markets, which is a situation known every bit contango. This cost departure is caused past sellers demanding more than money to withhold settlement longer.

Bitcoin 3-month futures annualized ground. Source: Laevitas.ch

As depicted above, the current ix% annualized premium is neutral merely shows an improvement over the previous couple of weeks. That indicates that traders are charily optimistic, leaving room for farther long leverage when confidence is fully restored.

Options traders go out 'fear' fashion

To exclude externalities specific to the futures instrument, 1 should also analyze options markets.

The 25% delta skew compares similar telephone call (buy) and put (sell) options. The metric volition plow positive when "fright" is prevalent as the protective put options premium is higher than like risk call options.

The opposite holds when market makers are bullish, causing the 25% delta skew indicator to shift to the negative area. Readings between negative viii% and positive 8% are usually accounted neutral.

Deribit BTC options 25% delta skew. Source: Laevitas

Notice how Bitcoin option traders entered the "fear" level on Sept. 25 as the $41,000 back up was tested multiple times. All the same, a drastic change has taken place since Sept. 30, and the indicator now sits at a neutral zone.

As the state of affairs currently stands, both the futures' basis and options 25% skew show a typical "glass half full" scenario. Pregnant that even though Bitcoin reached its highest level in 27 days and is to a higher place the $50,000 resistance, there's still room for buyers to strap on additional leverage before metrics flash signs of overextension or euphoria.

A $50,000 breakout with the electric current meager derivatives data would commonly be interpreted as a weakness. Still, because that the total crypto capitalization is still in the same place as xxx days agone and the unmitigated regulatory concerns, there is no reason to worry. At the moment, neither the futures markets nor the options markets show any signs of bearishness.

The views and opinions expressed here are solely those of the author and do non necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You lot should conduct your own research when making a decision.