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Experts pointed to the potential for a surge in volatility in the cryptocurrency market


The ratio of open interest (OI) in futures and perpetual contracts for Bitcoin and Ethereum to their capitalization has reached a record. Against the backdrop of the current consolidation, this may be a harbinger of a sharp increase in volatility, analysts at Arcane Research admitted.

OI to capitalization in digital gold reached 3.21%, in Ethereum — 4.24%.

Analysts noticed that this ratio is kept near the peaks, despite the past The Merge. Ahead of this event, many players were hedging or taking directional positions.

To mitigate the potential "brutal" deleveraging, experts suggested using straddle strategies. They allow you to bet on a structural shift in volatility.

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The implied volatility parameter in bitcoin options has dropped to its lowest level since April.




Opinion of Glassnode analysts

Based on the analysis of behavioral patterns, market structure and on-chain indicators, the end of the bear market is nearing. Glassnode analysts write about this.

According to experts, it may take several more months to complete the current phase.

Bitcoin has been consolidating in a tight range for over 120 days, not responding to increased volatility in traditional financial markets.

Experts drew attention to the largest outflow of funds owned by whales from exchanges since June 2022 (15,700 BTC). The behavior of large market participants, as a rule, indicates the direction of price trends, they added.

Analysts estimate the realized price in the context of exchange-related "whale" transactions at $15,700. This is a "psychologically important" price level.

On the metric of total supply in profit, the market has approached the cyclical bottom. Adjusted for 3.7 million BTC inactive for more than 7 years, this share was 39%. In 2019 and 2022, the reversal occurred when the rate was 32% and 37%, respectively.

The Net Unrealized Profit/Loss (NUPL) indicator, adjusted for the "lost" 3.7 million BTC, dropped to -0.39. The metric has broken through the threshold level of -0.25, which indicates an underestimation of the market.

The NUPL has been in the “surrender” area (below zero) for 119 days. In previous bearish phases, this period was 138 and 301 days (excluding the shock at the time of the March 2020 pandemic, 9 days).

The indicator of the “unprofitable” supply (31%) of coins attributable to hodlers overcame the threshold of 20% a month and a half ago. This indicates that long-term investors are likely to pass the moment of capitulation. Previously, it took six to ten months for the market to turn around for the metric to return below 20%, which coincided with a cyclical reversal.

On October 7, after the report on the US labor market, the price of bitcoin fell below $20,000

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