Bitcoin’s (BTC) recent price action has disappointed most investors, especially when one considers that the total altcoin market capitalization rallied 24% in nine days to reach a $1.35 trillion all-time high on May 9. 

Bitcoin’s 62% accumulated gain in 2021 has BTC traders feeling somewhat frustrated with altcoins and meme coins pumping to new daily highs.

On May 10, Fidelity, a $3.8 trillion global asset manager, filed for a Bitcoin exchange-traded fund (ETF) request with the United States Securities and Exchange Commission. Fidelity’s Wise Origin Bitcoin (BTC) partnered with the Chicago Board Options Exchange (CBOE), and the SEC’s first response window will close in 44 days.

On May 11, Palantir (PLTR), a $30 billion data analytics company founded by billionaire Peter Thiel, announced that it had started to accept Bitcoin payments. The firm is likely to follow in Tesla (TSLA) and MicroStrategy’s (MSTR) footsteps by adding BTC to its balance sheet, and the firm could have more than $2 billion in cash on hand for investments.

In other news, the proposed Taproot upgrade aims to make complex transactions cheaper, faster and easier to deploy. More importantly, this upgrade would bring some privacy to multisig and time-lock functions.

Taproot activation will only be given the green light if 90% of all mined blocks include an activation signal ahead of August 11.

However, despite all this positive news, BTC’s price action has not taken its usual bullish turn. The most significant immediate hurdle appears to be the lack of a regulatory framework. Joanna Wasick, a partner at law firm BakerHostetler, told Cointelegraph:

“How many people using crypto for payments know exactly what the tax implications are of their payment transactions?”

Retail traders are not demanding excessive leverage for longs

The first evidence that traders are in utter disbelief comes from the extremely modest perpetual funding rate. Futures contracts have an embedded rate that is usually charged every eight hours to ensure no exchange risk imbalances. Even though the buyers’ and sellers’ open interest is matched at all times, their leverage can vary.

When longs are demanding more leverage, they will be the ones paying the fee. Therefore, the current situation can be interpreted as bullish. The opposite holds when shorts are using more leverage, thus causing a negative funding rate.

Take notice of how the current 0.02% rate, equivalent to 1.8% per month, is much smaller than the recent peaks. While professional traders tend to prefer the fixed-month calendar futures, retail dominates perpetual ones, avoiding the expiries’ hassle. Therefore, this data shows that there is a lack of appetite since April 17.

The options skew indicator is on the verge of turning bullish

To better understand how pro traders are positioning themselves, investors should look at the options markets. Call options allow the buyer to acquire Bitcoin at a fixed price on contract expiry. On the other hand, put options provide insurance for buyers and protect against price drops.

Whenever market makers and pro traders are leaning bullish, they will demand a higher premium on call (buy) options, which will cause a negative 25% delta skew indicator.

A skew indicator between -10 and +10 is deemed neutral, which has been the case since April 15. This data is evidence of a balanced risk assessment from whales and market makers between downside and upside risk.

In line with today’s price drop, there is little evidence that option traders are bullish. This data also aligns with the BTC perpetual futures markets.

Bitcoin has managed to close above $50,000 in 65 out of the past 66 days, likely creating a ‘comfort zone’ for bulls. Therefore, as long as this support stands, there is still hope that Bitcoin will notch a new record-high.

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