Despite the short bounce, Bitcoin still experiences extreme volatility, limiting every upward attempt and keeping its price below the $65,000 level. In this unfavorable market environment, the underlying assets may enter a critical stage as leverage Dries steadily across the market.
Moderate leverage appears in the Bitcoin market
Bitcoin The pair is seeing continued downward pressure, but the report shows that the market has just made a major turnaround that could play a role in its short-term trajectory. With increasing volatility, the Bitcoin market appears to be moving into a low leverage phase as traders become more cautious and speculative excesses begin to subside.
A Final analysis Bitcoin Leverage Squeeze Zone Written by João Widson, founder of Alphractal and author of CryptoQuant, shows that BTC has left the extreme leverage stage and moved to moderate and minor leverage. This implies that the risk of large-scale liquidations, which often accompany highly leveraged conditions, has diminished as aggressive positions in derivatives markets have declined.
A long time ago The merchants were liquidated In the past week, the risk of forced liquidation has decreased significantly. However, Widson highlights that the market has not yet reached the blue/purple area shown on the chart, which represents severe deleveraging.
In the past, this area was considered an ideal area for safer exposure. The expert claims that the market has not yet reached that stage, but it will likely take a few more weeks or months before we reach that stage.
Although it may sometimes refer to a Low appetite for riskLower leverage may indicate a healthier market structure based on high spot demand rather than speculative momentum. Despite this shift to moderate and slight leverage, Woodson urged investors to approach the derivatives market with caution. He added: “If you do not understand its validity, you could be liquidated at any moment.”
Small BTC whales are now experiencing losses
With the Bitcoin market in depth In a volatile situationInvestors are starting to feel the pressure of this downward move, even the largest investors. CW, data analyst and investor, I mentioned On the X the young whales are now underwater as bearish performance escalates.
Here, the little whales represent wallet addresses containing between 100 BTC and 1,000 BTC, and these investors are now back in the losing position. This shift in profitability is due to… The recent decline in the price of BTC To a threshold of $60,000.
In order for the group to return to the profit zone, the expert stated that the Bitcoin price must rebound to the $64,000 level. CW added that Bitcoin’s short uptrend began as these investors slowly approached the profit zone. Meanwhile, reclaiming the $64,000 level is the first condition to start a rally.
At the time of writing, Bitcoin was trading at $63,370, and was showing a roughly 1% rise over the past day. While prices are slowly turning to the upside, Bitcoin trading volume during the same time frame fell by more than 5%.
Featured image from Pixabay, chart from Tradingview.com
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