Leverage Wipeout? Why Bitcoin Dropped 5% And Could Re-Test Low Levels
Bitcoin has chosen violence with a sudden move to the downside resulting in a 5% loss in the daily chart. As of press time, the first crypto by market cap seems to be recovering as it moves back to the mid-zone of its current levels. Related Reading | Bitcoin Maximalism – Crypto Survivors and OG’s Could Make a Case to Differ Bitcoin trades at $65,442 still with a 3.6% profit in the daily chart. In the short term, BTC’s price has found support at these levels, but could see further downside if it dropps below $63,000. To the upside, much of the resistance has disappeared and BTC seems....
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Leverage is widely used in the crypto industry. While leverage has the potential to increase returns, it also amplifies downside risks. Leveraged trading of cryptocurrencies — i.e., trading crypto with borrowed funds — comes with significant risks. This is mainly due to the capricious nature of the market.In May, the cryptocurrency market, which had grown significantly over the past couple of years, recoiled violently following a cascade of negative market events, losing over 50% of its market cap. The pullback, which caused a jarring $2 trillion market wipeout, also exposed some of the....
Bitcoin’s drop to $42,000 obliterated its open interest and liquidated a large swath of leveraged traders, but analysts say OI resets typically provide great buying opportunities. The weekend is upon us and fear remains the dominant short-term sentiment in the cryptocurrency market. Earlier today Bitcoin (BTC) price dropped to $47,250 and investors are biting their nails after data from the U.S. consumer price index (CPI) shows inflation reaching a forty-year high at 6.8%.Data from Cointelegraph Markets Pro and TradingView shows that a midday push by bulls to reclaim the $50,000 support....
The funding rate of Bitcoin dropped to a level unseen since September 2020, signaling fear in the market. The funding rate of Bitcoin (BTC) has dropped to levels not seen since September 2020 as the price of Bitcoin plummeted below $52,000 on April 18. Quant trader and analyst Lex Moskovski says it shows fear has returned to the market.According to the data from Glassnode, the average Bitcoin futures funding rate across all exchange dropped to as low as around -0.03% on SundayWhat is funding rate and why does it dropping matter?Bitcoin futures exchanges use a mechanism called "funding" to....
On-chain data shows the Bitcoin leverage ratio has surged up to a new all-time high, suggesting the market could be heading towards high volatility. Bitcoin All Exchanges Estimated Leverage Ratio Sets New ATH As pointed out by a CryptoQuant post, the funding rate has remained neutral while the leverage has increased in the market. The “all exchanges estimated leverage ratio” is an indicator that measures the ratio between the Bitcoin open interest and the derivative exchange reserve. What this metric tells us is the average amount of leverage currently being used by investors....
Ethereum is leading the charge on this fresh run towards new frontiers. As of press time, the second crypto by market cap trades at $4,432 with a 5.6% profit in the daily and 9.1% profits in the weekly chart. Up 500% Year To Date, Ethereum has rallied on the back of massive adoption of non-fungible tokens (NFTs), decentralized finances (DeFi), and institutional demand. Related Reading | TA: Ethereum Outperforms Bitcoin, Why ETH Could Rally To New ATH As seen below, in the chart shared by Joe Orsini research director at Eaglebrook Advisors, Ethereum has gone from under $1,000 to its....