As a seasoned crypto investor with a decade of experience under my belt, I find the recent surge in Bitcoin price intriguing, especially given the shift towards leveraged bets in derivatives markets. While I’ve seen market cycles come and go, this one seems to have its own unique flavor.
It seems that the current increase in Bitcoin‘s value mirrors a change in the way investors are behaving, as suggested by an analyst from CryptoQuant who goes by the name ‘crypto sunmoon.’
On the CryptoQuant QuickTake platform, an analyst pointed out that the ongoing bull market appears to be fueled primarily by high-leverage wagers, predominantly within the derivatives sector.
This trend stands out because it goes against the pattern seen in previous market cycles, during which Bitcoin bull runs were usually associated with higher deposits into spot exchanges.
Leveraged Bets’ Role in Bitcoin Price Growth
Expanding upon the concept of leverage trades, it means utilizing money that you’ve borrowed to amplify the scale of your investment. To illustrate, if someone employs 2x leverage, they are capable of opening a trade with double the amount of their own funds.
When it comes to Bitcoin future trades, this method can yield profits during price surges, but it’s not without its dangers. Should the market move adversely to their position, traders may experience substantial losses known as “liquidations”.
The expert observes that an increase in Bitcoin being moved to derivative trading platforms indicates growing investor trust, implying faith in future price increases. This trust could set off a self-reinforcing cycle, as higher prices might spur more leveraged wagers, thereby strengthening the ongoing bull market trend.
Bitcoin bull market begins with leveraged bets
Instead of being sold directly on the open market, bitcoin is increasingly being stored in futures exchanges for speculative trades with leverage, signifying that the bullish trend in the market may persist.” – Paraphrased by AI assistant
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— CryptoQuant.com (@cryptoquant_com) October 30, 2024
BTC Price Performance And Outlook
Over the last seven days, Bitcoin’s value has climbed by 8.2%, now standing at approximately $71,804. This rise in price makes the concept of leverage more significant. It’s worth noting that Bitcoin experienced a small dip from its peak of $73,562 within the past day, but it continues to exhibit positive trends.
As a researcher, I’ve observed a consistent upward trend in Bitcoin’s price, along with an increase in leveraged investments, which suggests a widespread optimism among investors about Bitcoin’s future price trajectory. The analyst’s view is that as long as Bitcoin continues to be invested through futures rather than the spot market, this bullish sentiment is likely to persist.
Significantly, making bets using leverage is merely one indicator among many that track Bitcoin’s performance. This hints at the possibility of a sustained rise in its value.
To date, the Stablecoin Supply Ratio Oscillator (SSRO) has reached levels comparable to those experienced in 2022, indicating a significant drop. This decline indicates an increased conversion of stablecoins into Bitcoin, which could be interpreted as heightened interest or demand for the digital asset.
Currently, several key indicators suggest that Bitcoin’s price may continue to rise based on its technical outlook. Earlier today, well-known crypto analyst Ali pointed out that historically, Bitcoin has tended to reach the 1.618 and 2.272 Fibonacci retracement levels.
If the asset’s trend repeats itself as it has in the past, Ali anticipates that Bitcoin (BTC) could potentially reach a price ranging from $174,000 to $462,000.
Historically, during previous Bitcoin bull runs, its peak has occurred near the 1.618 and 2.272 Fibonacci retracement levels. If a similar pattern repeats, the potential future high for Bitcoin could range from $174,000 to $462,000!
— Ali (@ali_charts) October 30, 2024
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2024-10-31 04:35