Understanding the On-Chain View of Bitcoin's Potential Breakthrough of 30K
Bitcoin's recent surge has been a topic of interest for many investors and analysts. The on-chain view of Bitcoin's potential breakthrough of 30K provides valuable insights into the current market trends and risk factors that new participants should consider. In this article, we will discuss the significance of spot trading volume, derivatives, and the Estimated Leverate Ratio as key indicators for understanding the current market conditions.
Spot Trading Volume and Derivatives:
The ratio of spot trading volume to derivatives has been declining since March 26. The actual driving force behind Bitcoin's rise in the first quarter of 2023 is spot trading. The proportion of derivatives was originally higher than that of spot, but the fact that the ratio is rapidly decreasing can be interpreted as increasing risk for new market participants. This trend suggests that the market is becoming more volatile, and investors need to be cautious when entering or exiting the market.
Estimated Leverate Ratio:
The Estimated Leverate Ratio is a measure of leverage used by market participants. The rebound of this indicator indicates that 30K is the psychological resistance line. It can be judged that some market participants are using a strategy of responding with a high leverage with a low weighting due to the change in the aforementioned situation. This strategy limits losses and can maximize profits when facing a decline. However, investors need to be cautious when using high leverage as it can also lead to significant losses.
Takeaways:
The decline in the ratio of spot trading volume to derivatives suggests that the market is becoming more volatile, and investors need to be cautious.
The Estimated Leverate Ratio rebound indicates that 30K is the psychological resistance line.
Investors should be cautious when using high leverage as it can lead to significant losses.
Conclusion:
Understanding the on-chain view of Bitcoin's potential breakthrough of 30K is crucial for investors. The decline in the ratio of spot trading volume to derivatives and the rebound of the Estimated Leverate Ratio indicate that the market is becoming more volatile. New market participants need to be cautious and consider the risk factors associated with the current market conditions. By understanding these key indicators, investors can make informed decisions and minimize their risk exposure.
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