Bitcoin, the synonym of digital currency, has attracted much attention in recent years. Although the price of Bitcoin has been consolidating recently, traders are full of confidence in the future market. They are optimistic about the potential of Bitcoin and believe that it will show greater value in the future. Let's take a deeper look and see what future development trends traders are looking at.

In the market where Bitcoin is consolidating, traders are still optimistic about future development. They believe that although the current price fluctuations are small, the technology and potential contained in Bitcoin cannot be underestimated. As a decentralized digital currency, the blockchain technology behind Bitcoin has laid a solid foundation for its future development. It is this technological innovation that has made Bitcoin attract much attention in the financial field.

Traders' optimism about the future market of Bitcoin is not without basis. In recent years, with the rapid development of the global digital currency market, Bitcoin has gradually become the focus of investors. According to statistics, more and more institutional and individual investors have begun to include Bitcoin in their investment portfolios, and this trend is unstoppable. Although the price of Bitcoin fluctuates greatly, its potential value is attracting more and more capital inflows.

In addition to the attention of investors, the application of Bitcoin is also expanding worldwide. More and more companies are beginning to accept Bitcoin payments, and the convenience and security of this digital currency are widely recognized. For example, some well-known e-commerce platforms have begun to accept Bitcoin payments, providing users with more diversified consumption options. The expansion of this application scenario has also added more possibilities for the future of Bitcoin.

At the policy level, some countries have also begun to actively explore the development path of digital currencies. The central banks of some countries have begun to study the issuance of central bank digital currencies, which will bring more legitimacy and standardization to the digital currency market. This policy support has also created a better environment for the development of digital currencies such as Bitcoin.

Overall, although Bitcoin is currently in a consolidation state, traders are still confident in its future market. The innovation of blockchain technology, the attention of investors, the expansion of global application scenarios and policy support have laid a good foundation for the future development of Bitcoin. Traders may have insight into these potential opportunities and trends. As time goes by, the future of Bitcoin may show a more dazzling light, let us wait and see.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Aside from a brief test of $18,100 on Dec. 1, the Bitcoin (BTC) market has remained relatively quiet over the week. This suggests that investors are beginning to realize that Bitcoin could be in for a longer period of consolidation after a 77% rally since October.

BTC/USD 4-hour chart Source: TradingView

Whenever Bitcoin price stabilizes, expectations for altcoins to rebound are always growing. But that has not been the case recently, with Bitcoin dominance increasing by 0.8% this week to 63.6%.

This movement suggests that investors are either waiting for a breakout above the $20,000 resistance level or are concerned about possible negative price action. As such, this movement suggests that their confidence in altcoins has waned.

Top 16 Cryptocurrency Performance Weekly Source: Nomics & CoinMarketCap

The chart above shows how Bitcoin has gained market share this week. With the exception of Nem (XEM), the rest of the altcoins are up 0.5%. Overall, trading volumes have been disappointing, though that is partly due to Bitcoin hovering around $19,200.

Whenever traders are hesitant, they reduce their positions and wait for a better entry point. Therefore, this week's drop in volume is a correction rather than a lack of interest.

Institutional investors accumulate Bitcoin as Bitcoin price consolidates

Crypto fund Grayscale Investments continues to actively add Bitcoin to its portfolio, with its Bitcoin management scale exceeding the $10 billion mark.

Grayscale Investment Bitcoin Holdings Source: bybt.com

In the past week, Grayscale has accumulated nearly 13,000 BTC, holding a total of 547,000 BTC. Therefore, it has been another great week for Grayscale Bitcoin Trust. The same excitement can be seen by analyzing its premium relative to the effective BTC held per share (currently 0.00095153 BTC).

Grayscale Bitcoin Trust Premium Source: TradingView & Grayscale

As mentioned above, the Grayscale Bitcoin Trust premium increased from 11% in the previous week to 22%. The average premium of this indicator in the past 90 days is 14%. Therefore, this indicator reflects positive momentum with the recent 6-month high.

Perpetual Futures Funding Remains Stable

Perpetual futures (also known as inverse swaps) have an embedded rate that is usually charged every eight hours. The funding rate ensures that there is no imbalance in trading risk. Even if the open interest between buyers and sellers is always consistent, the leverage may be different.

If the perpetual futures price is significantly greater than the spot price at a certain moment, longs need to pay shorts. If the contract price is significantly less than the spot price at a certain moment, shorts need to pay longs. This issue is particularly important during bull markets, which usually have more long demand.

Weekly rates above 2% indicate extreme optimism. This level is acceptable when the market rebounds, but it is problematic if the Bitcoin price is sideways or in a downtrend.

In this case, the high leverage on the buy side increases the possibility of large liquidations during unexpected price drops.

BTC Perpetual Futures Funding Rate Source: Digital Assets Data

Note that despite the stagnation of Bitcoin's price, the weekly funding rate has remained at a healthy level. This data shows that traders remain optimistic, even if they are not over-leveraged.

There was also a brief moment of excitement in the early hours of December 1 when Bitcoin tested the $19,900 level.

Futures premium peaked but has since returned to normal

Funding rates can introduce some distortions as it is the preferred tool for retail traders and is therefore subject to excessive leverage. Professional traders, on the other hand, tend to dominate long-term futures contracts with set expiration dates.

By measuring how much of a premium futures are to the general spot market, traders can judge the degree of bullishness for themselves. Futures typically trade at a premium of 0.5% or more to spot prices.

Whenever the premium turns negative, it is a warning red flag. This situation, also known as backwardation, indicates that the market is turning bearish.

BTC Futures Premium in January 2021 Source: Digital Assets Data

The chart above shows that this indicator briefly touched 2% on December 1, but then adjusted to 0.9% as Bitcoin failed to break through the $20,000 resistance level. Despite the decline, the premium has remained above the minimum threshold of 0.5%, indicating that professional traders are optimistic about it.

Options Put/Call Ratio

By measuring whether more activity is through call (buy) options or put (sell) options, one can gauge overall market sentiment. Generally speaking, calls are used for bullish strategies and puts are used for bearish strategies.

A put-to-call ratio of 0.70 indicates that open puts are 30% less than calls, and can therefore be considered bullish.

In contrast, a put-to-call ratio of 1.20 indicates that open puts are 20% more than calls, which can be considered bearish. One thing to note is that this metric aggregates the entire Bitcoin options market.

BTC Options Put/Call Ratio Source: Cryptorank.io

With Bitcoin prices approaching $20,000, it is natural for investors to seek downside protection. As a result, the put/call ratio peaked at 0.70 on December 2. Despite the increase, calls still outnumber puts by 30%.

After this period of excitement, this indicator has recovered to a healthy 0.63. Considering that 0.67 is the average of the past 3 months, this should be considered bullish as fewer investors are buying protective put options.

Bitcoin Price Trends Steady, but Investors Remain Bullish

Overall, each of the key indicators discussed above remain stable within the expected range, especially considering the market's recent pullback to $18,100.

When Bitcoin remains above $19,000, investors may begin to speculate on the possibility of Bitcoin setting new all-time highs, and some may rush to take profits and exit.

At present, no indicator is ringing alarm bells. Although the lack of altcoin rallies during Bitcoin's consolidation may dampen investor sentiment, the overall bullish sentiment remains.