"Don't fight the trend" is an old saying in the markets, and there are other variants of the phrase like "never catch a falling knife." The lesser line is that traders should non attempt to anticipate tendency reversals, or even worse, endeavour to improve their average price while losing money.

It really doesn't matter whether i is trading soy futures, silver, stocks or cryptocurrencies. Markets generally move in cycles, which can last from a few days to a couple of years. In Bitcoin's (BTC) case, it'due south hard for anyone to justify a bullish instance past looking at the chart below.

Bitcoin toll in USD at Coinbase. Source: TradingView

Over the past 25 days, every attempt to break the descending channel has been abruptly interrupted. Curiously, the trend points to sub-$40,000 by mid-October, which happens to exist the deadline for the United States Securities and Substitution Commission decision on the ProShares Bitcoin ETF (Oct. xviii) and Invesco Bitcoin ETF (Oct. 19).

According to the CoinShares weekly report, the contempo price action triggered institutional investors to enter the sixth consecutive calendar week of inflows. There has been nearly $100 meg worth of inflows between Sept. 20 and 24.

Experienced traders claim that Bitcoin needs to reclaim the $43,600 support for the bullish tendency to resume. Meanwhile, on-concatenation data points to heavy aggregating, as the falling exchange supply has been dominant.

Perpetual futures show traders neutral to bearish

To guess investor sentiment, one should analyze the funding charge per unit on perpetual contracts because these are retail traders' preferred instruments. Unlike monthly contracts, perpetual futures (inverse swaps) trade at a very like price to regular spot exchanges.

The funding rate is automatically charged every eight hours from longs (buyers) when enervating more leverage. However, when the situation is reversed, and shorts (sellers) are over-leveraged, the funding rate turns negative, and they become the ones paying the fee.

Bitcoin perpetual futures viii-hour funding rate. Source: Bybt.com

A 'neutral' state of affairs involves leverage longs paying a small-scale fee, oscillating from 0% to 0.03% per viii-hour period, which is equivalent to 0.6% per week. However, the above chart shows a slightly bearish trend since Sept. 13, when the funding charge per unit was last seen above the 0.03% threshold.

The put-to-call ratio favors bulls, but the trend has changed

Unlike futures contracts, options are divided into two segments. Phone call (buy) options allow the heir-apparent to acquire Bitcoin at a fixed price on the expiry engagement. Generally speaking, these are used on either neutral arbitrage trades or bullish strategies.

Meanwhile, the put (sell) options are normally used as protection from negative price swings.

To sympathise how these competing forces are counterbalanced, one should compare the calls and put options open interest.

Bitcoin options open involvement put-to-telephone call ratio. Source: Laevitas.ch

The indicator reached a 0.47 bottom on Aug. 29, reflecting the 50,000 BTC protective puts stacked against the 104k BTC phone call (buy) options. Yet, the gap has been decreasing as the use of neutral-to-bearish put contracts started to get traction later the Sept. 24 monthly expiry.

According to Bitcoin futures and options markets, it might seem premature to phone call a 'surly' catamenia, merely the last two weeks bear witness absolutely no signs of bullishness from derivatives indicators. It appears that bulls' hope clings on to the ETF deadline acting as a trigger to interruption the current marketplace structure.

The views and opinions expressed here are solely those of the author and practise not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risk. You should conduct your ain inquiry when making a decision.