Bitcoin derivatives have reached an important milestone. The estimated leverage ratio of this asset is at its highest point in the last year. data CryptoQuant is a show that you can watch.
The ratio between open interest and coin reserves at exchanges is a measure of increased leverage among participants. Investors are increasingly taking more risks by increasing leverage. “employing higher leverage,” This could have a significant impact on Bitcoin’s value.
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Bitcoin Market Impact of High Leverage
This increase highlights how investors are increasingly using leverage in the derivatives industry. Leverage is a way for traders to access funds in order to expand their Bitcoin exposure without having to own the entire amount upfront.
This can increase profits in periods of high profitability. market upswings. This increases the possibility of massive losses, if the markets move against you. Source
High leverage ratios can be both a blessing and a curse for the cryptocurrency market. It may show that the crypto market is becoming more confident about the potential of Bitcoin to rise, particularly in the event the market experiences a breakout.
The other side of the coin is that if Bitcoin’s price falls further, there could be a large wave liquidations due to over-leveraged position being forced to shut down. exacerbating the downward pressure.
Market analysts are noticing this rising trend in leverage. CryptoQuant analyst EgyHash noted that the projected leverage ratio could increase volatility on the market if it reaches its maximum point in this year.
Leverage increases the market’s sensitivity to fluctuations in price. Small movements can create cascading effect and cause liquidations.
Bitcoin Future: Analysts’ Views
Bitcoin continues to rise in price face challengesParticularly its inability break through key resistance.
Bitcoin’s momentum has been unable to be maintained. In spite of the increased leverage on the market, Bitcoin only experienced a 0.2% gain in the past day and 2.1% loss over the week. The asset now trades below $57,000. current price of $56,871.
While Bitcoin remains under pressure and the price is still low, prominent analysts from around the world have offered their opinions on where cryptocurrency will go in future.
CryptoBullet was one analyst who recently compared Bitcoin’s current cycle with bull markets in the past.
CryptoBullet has posted a new post at X. highlighted The Stochastic Relative Strength Index has patterns similar to those observed during Bitcoin’s 2013 rally.
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CryptoBullet’s analysis indicates that Bitcoin may be entering the last phase of the current cycle. This could lead to a significant increase in value. “Wave 5” The price increase could be a major factor in the rise of prices asset to new highs.
#Bitcoin 1M Big Picture
This doesn’t seem to be the same cycle as 2017 or even 2021. Stoch RSI confirms that it looks more like the 2013 cycle.👇
This cycle Stoch RSI peaked in March and during this 6-Month Consolidation in Wave 4 the Stoch RSI went lower than in 2016-2017 or in H2 2020-2021… https://t.co/Ni9NHHKxis pic.twitter.com/nreQcpAIFP
— CryptoBullet (@CryptoBullet1) September 10, 2024
Although the analyst recognized that this cycle was different than those in 2017 and 2021 the technical indicator points to the possibility that Bitcoin’s chart could reach a higher peak soon.
Featured image was created with DALL – E, chart from TradingView
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Source: www.newsbtc.com