Bitcoin Leveraged Positions Building Up: BTC To $50,000 Or $60,000?

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As a seasoned analyst with a decade of experience in the crypto market under my belt, I find myself cautiously optimistic about Bitcoin’s current position. The downtrend is undeniable, and the bearish breakout formation is a stark reminder of the volatile nature of this asset class. However, the massive accumulation of leveraged positions since March 2024 could potentially lead to a significant shift in sentiment if bulls manage to regain control.

Currently, Bitcoin is steady at its current value levels, as observed in the daily chart analysis. However, the overall trend still indicates a downward movement, with the price action continuing within a bearish breakout structure. This perspective stems from the significant drop on September 7, which led to a substantial decrease in the world’s most valuable cryptocurrency, coming close to the crucial psychological level of $50,000.

Bitcoin Leveraged Positions Building Up

In simpler terms, if the bulls fail to reverse the losses that occurred on September 7, the market trend is likely to continue downwards. This could lead to a further decline, potentially even dropping below the levels seen in August.

In the midst of ongoing growth, an on-chain expert points out significant accumulation of leveraged positions starting from March 2024. It’s unclear at this point whether prices will rise or fall, but as things stand now, it appears that sellers hold more control in the market.

Bitcoin Leveraged Positions Building Up: BTC To $50,000 Or $60,000?

Should bulls gain control, it would significantly strengthen the confidence of Bitcoin bullish investors, as they’ve faced significant declines over the last 3 months. However, the increasing use of leverage suggests that we could see increased market volatility in the near future, regardless of the direction of the price movement.

Over the past fortnight, Bitcoin’s price has been on a downward spiral, causing a dip in investor confidence and reducing trading activity. Starting from late August, Bitcoin’s value dropped from approximately $66,000, amounting to nearly a 20% decrease by last week’s lowest points.

Bitcoin Leveraged Positions Building Up: BTC To $50,000 Or $60,000?
 

Simultaneously, there’s a noticeable reduction in market turbulence that mirrors the conditions experienced prior to Bitcoin’s significant rise. Starting from late February, it rapidly escalated and reached new record highs around mid-March of 2024.

Average Funding Rate Is Bullish, Will This Change?

As a researcher, I’ve found an intriguing pattern in trading data: Despite experiencing some dips, the overall funding rate across derivatives exchanges has maintained a bullish trend for more than a year.

This growth might be attributed to a change in market trends that led the world’s most valuable cryptocurrency to make a turnaround, starting from late Q3 of 2023. This resurgence caused Bitcoin to discard its vulnerabilities and surge beyond $70,000, after the losses it suffered in 2022 that drove its value down to as low as $15,800.

To have bulls prevail in the derivatives sector, prices should gradually increase. Surpassing $66,000 and reaching the previous highs of July could stimulate interest, propelling the coin beyond the significant resistance level of approximately $72,000 that has persisted for several months.

Bitcoin Leveraged Positions Building Up: BTC To $50,000 Or $60,000?

Nevertheless, for this situation to unfold, there should be investments flowing into Bitcoin ETFs. However, as prices have been decreasing, there has been a surge in withdrawals from these products, indicating that institutions are adopting a cautious approach. So far, SosoValue data indicates that over $169 million has been withdrawn by issuers of spot Bitcoin ETFs based in the United States.

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2024-09-10 01:17