Bitcoin Weekly Steady Footing & Biggest Holders aren’t Startled
The cryptocurrency market can delight many traders this week. Members noticed a healthier trend on it, especially after the posts that sowed alarm, Jeff Dorman reports.
Arca put forward the message that while many stocks of cryptocurrencies and other technologies are rallying, bitcoin has suffered defeat. He sees the reason in the leverage. It is precisely this, according to him, that worsens the situation of price movement at a time, when something natural puts pressure on sales.
Dorman informs that the correction was much needed and expected. Up to this point, the funding rate for perpetual swaps was at a 6-month-high. In other words, longs had to pay shorts about 25 bps a day to stay in their position. Because the funding rate must find application in motivating parties to participate and to maintain a balance.
Skew also suffered record negative lows. At this time, the call option receives more than 30% value than the put option at the beginning of the week. Dorman notes that this was because the put/call balance dropped significantly. These options are of great importance:
● A call option leaves the opportunity to purchase an asset.
● A put option leaves a chance to sell an asset.
Nevertheless, the market is going through good times. This is because the leveraged funds were promoted, according to the director of information technology.
Dorman believes that some reports have scared traders, although many of these documents have not been taken into account.
First, he cites Janet Yellen's report as an example. She believes that bitcoins and other types of cryptocurrencies can be used for illegal purposes. Many began to refute this statement. For example, a post from Chainalysis, a blockchain forensics company. It said that the level of criminal fraud with cryptocurrencies decreased to 0.34% of the universal number of transactions. Double spending BTC was another example. Many were convinced that the calculated double-spend would destroy the validity of bitcoins and bitchains.
Fear, Uncertainty & Doubt Factors
But don't just lay the blame on the doorstep of recent reports. Crypto intelligence company Con Metrics has speculated that other factors contributed to the fall in bitcoin prices. Fear, uncertainty, and doubt attacked investors for other reasons as well.
It was noted in the newsletter that this is a good chance for sophisticated investors to accumulate a great deal of BTC. Coin Metrics describes an increase in addresses holding at least 1,000 BTC. They call the number 25 — this is how many addresses have become. This indicates that more people have influenced the statistics of the number of large holders.
The past week was profitable for the Grayscale Bitcoin Trust. The money did not stop being transferred to their accounts. It is known to be one of the main methods of getting access to BTC for many institutions.
In conclusion, the company assured: fear, uncertainty, and doubt grows along with the growth of interest in BTC. Nevertheless, the sky's the limit for large holders: they are not scared.
Meltem Demirors from CoinShares also shared her thoughts and predictions. She believes that market makers don't lose their grip or lose heart. She added that the digital asset management company traded more than $1.4 billion in the early days of the new year. At the same time, spot volumes do not stop growing. She notes that the amount of the BTC / USD trading ratio is revealed to be near 7x since the summer.
This is not even the latest news. Moreover, investors believe the price soars even higher, according to research firm Glassnode. The company released a message in which it noted that at this stage, investors will not agree to sell at a loss. The organisation was also expecting the cancellation of the bitcoin-adjusted SOPR (Spend Output Profit Ratio), so it wanted to keep balancing on the marketplace and guarantee the foundation for a new bull season.
Falls Can't be Avoided
There is no growth without falls — many analysts are sure. Well, that also applies to the cryptocurrency situation. Nik Patel — one of a million crypto traders — shared his thoughts on this matter. He believes that there are market participants who show a trend to close below ($30,000), which may look like a downtrend. Thus, they will fall to the limit of 25 thousand US dollars.
Crypto Ed, creator of Crypto-TA.nl did not stay out of the discussion. He shares the idea that perhaps traders should expect another step-down. Although he also could not resist joking: the price could break out of the current stage and break at $34,000, in such a case, he will probably make a fool of himself.
The head of the Asia-Pacific branch of the Luno crypto exchange, Vijay Ayyar, predicts a decline in Bitcoin over the next period of 10 years. It will experience a decline compared to the market capitalization of gold. At the same time, the trend has reversed, the marketplace shifted to Ethereum (ETH) and altcoins are growing as asset transactions.