Data from Skew shows Bitcoin’s (BTC) spot volume on LMAX Digital, an exchange that mainly caters to institutions, has overtaken retail-oriented exchanges. This signals that institutional investors could be building up positions as they expect the price to move higher in the future.
Along with spot purchases, institutional investors’ participation in the derivatives market has also increased. Data from Arcane Research shows that a record number of investors are taking delivery of Bitcoin from the Bakkt Bitcoin exchange.
Another metric that can be useful for traders is volatility. Bitcoin options data shows that the implied volatility of at the money options has dropped to a 16-month low. This suggests that traders do not expect a large down move in the near future, hence, they are not willing to pay a greater amount to hedge their positions.
Although data suggests that institutional investors are positioned for an upside move, retail traders should keep a close watch on the price action