Bitcoin’s Leverage Ratio Hits New High: What Does This Mean BTC?
2024年9月12日 - 5:00PM
NEWSBTC
The Bitcoin derivatives market has reached a notable milestone, as
the estimated leverage ratio for the asset has surged to its
highest level of the year, latest data from CryptoQuant shows. This
metric, which tracks the ratio of open interest to coin reserves on
exchanges, signals increased leverage use among market
participants. The growing trend suggests that investors are taking
on more risk by “employing higher leverage,” which could
significantly impact Bitcoin’s price. Related Reading: Bitcoin
Price Battles to Extend Gains: Will It Clear $58K? The Impact Of
High Leverage On Bitcoin’s Market The increase in Bitcoin’s
estimated leverage ratio highlights the growing use of leverage
among investors in the derivatives market. Leverage allows traders
to borrow funds to increase their exposure to Bitcoin without
needing to hold the full amount of capital upfront. While this can
amplify profits during periods of market upswings, it also
increases the risk of significant losses if the market moves
against the position. A high leverage ratio can often be a
double-edged sword for the crypto market. On the one hand, it may
indicate that investors are increasingly confident in Bitcoin’s
potential for an upward move, especially if the market sees a
breakout. On the other hand, if Bitcoin’s price continues to
decline, it could lead to a wave of liquidations as overleveraged
positions are forced to close, exacerbating the downward pressure.
This trend of rising leverage has drawn attention from various
market analysts. CryptoQuant analyst EgyHash pointed out that the
estimated leverage ratio reaching its highest point this year could
lead to increased volatility in the market. The higher the
leverage, the more sensitive the market becomes to price swings, as
even small moves can trigger liquidations and create cascading
effects. Analysts Weigh In On Bitcoin Future Meanwhile, Bitcoin’s
price continues to face challenges, particularly its inability to
break above key resistance. The cryptocurrency has struggled to
maintain momentum, and despite the increased leverage in the
market, Bitcoin has experienced a mere 0.2% increase over the past
24 hours and a 2.1% drop over the past week. As a result, the asset
is now trading below $57,000, with a current price of $56,871.
While Bitcoin’s price remains under pressure, several prominent
crypto analysts have shared their perspectives on what lies ahead
for the cryptocurrency. Among them is the analyst known as
CryptoBullet, who recently compared Bitcoin’s current cycle to
previous bull markets. In a post on X, CryptoBullet highlighted the
similarities between the present market and Bitcoin’s 2013 cycle,
noting that the Stochastic Relative Strength Index (Stoch RSI) has
shown patterns that mirror those seen during the 2013 rally.
Related Reading: Bitcoin Recovery: Has BTC Prevented A Fall To
$41,000 With This Surge? CryptoBullet’s analysis suggests that
Bitcoin could enter the final phase of its current cycle, with the
potential for a “Wave 5” price surge that could push the asset to
new highs. #Bitcoin 1M Big Picture This cycle doesn’t look like the
2017 or 2021 cycle. IMO it’s more like 2013 and Stoch RSI confirms
it 👇 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 While the analyst acknowledged that this cycle
differs from those of 2017 and 2021, the technical indicators point
to the possibility of a higher high on Bitcoin’s price chart
shortly. Featured image created with DALL-E, Chart from TradingView
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