London, UK, 4 Sep 2021, ZEXPRWIRE – Bitcoin has yet to rebound from its July depths, without one of its usual players: Leverage.
Dan Leos, a broker from Victoria-Coins says despite the fact that Bitcoin is at an all-time high, traders are not yet leveraging their positions. The spread between futures and spot prices for cryptocurrencies has shrunk since February which suggests low demand to borrow money in order to place bets on currencies like Bitcoin.
There are two scenarios that FRNT Financials Stephane Ouellette believes could explain the drop in Bitcoin price. The first is that traders aren’t convinced of a breakout, which makes sense considering past rallies have been followed with strong bearish movements. However, he favors the idea that leveraged players will come into play here, and “if they do…that would make recent $100k forecasts more likely to happen.”
FRNT’s co-founder and CEO, Ouellette on Bloomberg Quicktake Stock streaming program suggests that if the move is with low leverage as of now, $100k targets are very reasonable. He also said at last time there was a similar movement in price without much volume but soon after it took place we saw demand for Bitcoin through strong hands which pushed prices to around 20K.
Over the past seven sessions, Bitcoin has climbed steadily higher. It’s broken above key levels that bulls said would further fuel a rally in prices for this coin. This includes Friday when it continued its uptrend by rising as much as 4.9%. As of writing this article, Bitcoin is up nearly 50% since hitting a recent low back in August 2018 that had taken it below $30K at one point during summertime trading hours on cryptocurrency exchanges worldwide
Up in five of the last seven sessions, Bitcoin has been climbing higher despite falling to new lows earlier today (as per market close). That included yesterday where BTC rose nearly 5%, continuing an upward trend so far throughout December 2018. The price surge follows bad news about regulation changes and hacking events. Most recently, the Japanese exchange Zaif has come under cyber-attack and lost about $30 million in BTC.
In the crypto sphere, traders use leverage to boost returns. Many say that a May crash in prices caused by automated selloffs of leveraged positions exacerbated an already volatile market and led to more than 775k accounts getting liquidated over 24 hours for about $8.6 billion dollars’ worth of losses – equal to around 8% all crypto values at the time!
The maximum amount of leverage, which is how much a trader can borrow from their exchange to trade with cryptocurrency, has dropped across the board. Binance and FTX Trading reduced it down to 20 times last month after both saw many traders using margin trading as an opportunity for risk taking. The most common accounts in America offer only 10-15x but crypto exchanges still allow at least 3x more than that through these types of trades; they are enticing higher risks and bigger returns on investment (ROI) by playing into the dreams and fantasies of Wall Street investors who feel like this could be “the next big thing.”
Despite a number of negative headlines, including criticism over its toll on the environment and an increase in regulation from regulators around the world, Bitcoin is advancing. The U.S.’s Securities and Exchange Commission Chair Gary Gensler recently called crypto mining “the Wild West” that he wouldn’t compromise with protecting investors against scams or fraud when it comes to digital assets like cryptocurrencies such as Bitcoin.
Bitcoin price prediction 2019: Despite no concrete technical indicators to rely on in making future forecasts, we can still try to predict what could happen in the next four years after BTC hit a record high of almost 20k$ in December 2017 and then dropped to a two-year low in June 2018.
While the current market sentiment still seems bearish, there are reasons to believe that Bitcoin prices could pick up momentum heading into 2020. The block reward halving will happen in May 2020 which would reduce the supply of new Bitcoin coming into circulation almost twice as fast as it normally does every 4 years. And also 2021 should be huge for Bitcoin adoption worldwide because by then 2/3 of all Bitcoins will be mined. We saw a similar pattern back in 2013 when Bitcoin started picking up steam ahead of its last all-time high in December 2017.
The crypto market has taken another tumble since yesterday’s trading session, with few coins seeing notable losses over the past 24 hours to press
In a recent interview, Hunter Horsley, the CEO at Bitwise Asset Management said that these developments indicate greater regulatory clarity. This could help bring in new investors to this space and hopefully we’ll see more people come into crypto as well.
“I believe that the fact that crypto is becoming a space where people see strong regulatory reins and it’s permeating to all parts of this market, which can be seen as an amazing gift,” said Brian Kelly. “This means we are creating something new in cryptocurrencies.”
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