Bitcoin

<p>Bitcoin’s recent price spike, <a href="https://blockchainreporter.net/grayscale-triumphs-over-sec-in-key-legal-battle-btc-jumped-over-27k/" rel="noopener noreferrer nofollow">after the court decision in favour of Grayscale</a>, has been driven by futures markets, not spot exchanges. As per <a href="https://cryptoquant.com/" rel="noopener noreferrer nofollow">CryptoQuant</a> data, this sudden market change has sparked worries about Bitcoin liquidity and price swings, even with low trading volumes. Recently, Bitcoin market liquidity has decreased, increasing the risk of large price swings with few deals. Contrary to predictions, derivatives exchanges drove Bitcoin’s recent price increase.</p><h2 id="header-0">Crypto Market Volatility Persists Despite Modest Trade Volumes</h2><p>The “Funding Rate,” a standard statistic, indicates market sentiment. Although it did not reach severe levels, it was not expected to affect prices. The “Trading Volume Ratio (Spot VS. Derivative),” which showed a fall rather than a gain, suggests that the spot market did not boost <a href="https://blockchainreporter.net/bitcoin-price/" rel="noopener noreferrer nofollow">Bitcoin’s recent price spike</a>.</p><p>Compared to bounces in January, March, and June of this year, “Trading Volume (Spot VS. Derivative)” data showed a constant fall. <a href="https://blockchainreporter.net/glossary/trading/" rel="noopener noreferrer nofollow">Trading</a> volume dropped on the day of the price increase. It increased fears about the cryptocurrency market’s liquidity issue.</p><p>On the day of the spike, spot exchanges traded 74,699, while derivatives exchanges traded 1,416,108. This striking difference highlights spot trading’s waning interest, raising liquidity worries. The <a href="https://blockchainreporter.net/market/" rel="noopener noreferrer nofollow">cryptocurrency market</a> is subject to price volatility even with modest trade volumes due to decreased liquidity. Many have seen the current surge and felt “Fear of Missing Out” (FOMO), however, care is advised for investors.</p><h2 id="header-1">Volatility Risks Loom as Bitcoin’s Market Enthusiasm Grows</h2><p>FOMO-driven actions can lead to costly mistakes and unanticipated accumulations for investors and traders. Instead, during joyous periods, market research must be reasonable and data-driven.</p><p>Contrary to forecasts, derivatives exchanges drove Bitcoin’s price rise, indicating a drop in spot market activity and cryptocurrency market <a href="https://blockchainreporter.net/glossary/liquidity/" rel="noopener noreferrer nofollow">liquidity</a>. As market enthusiasm grows, investors must be cautious and strategic to shrink volatility risks. The Bitcoin landscape is full of uncertainties, therefore careful research is essential to success.</p>

Bitcoin’s Recent Surge Driven by Futures, Raises Liquidity Concerns

Table of Contents

BlockchainReporter

Other articles published on Aug 30, 2023

Bitcoin miner Canaan reports 33% increase in revenue in Q2

Poor Peter Schiff still doesn’t get bitcoin

BRICS: Total GDP of All 11 Member Countries

New football clubs on STEM

XRP Price Makes Bullish Case for Impending Rally to $1

OpenAI Nearing $1 Billion in Revenue Following ChatGPT Success

Join our free newsletter for daily crypto updates!