Wednesday, May 29, 2024

In Bitcoin, it’s Leverage Demand, not Leverage Itself, that’s driving the price down.

Many sites and blogs are singing songs of despair. The sites and blogs in question happen to be related to Defi or decentralized finance. Bitcoin has been dropping rapidly in November. Experts and analysts who have even a teeny tiny bit of interest in crypto are beginning to analyze the source of it. Some experts, who used to dabble in Stocks, had already predicted that the market would slow down as the holidays would approach. The reason behind this was cited to be the fact that people would want to convert their tokens into cash to enjoy the holidays. On a certain level, it makes sense as holding on to crypto coins as the holidays, a time to enjoy with family and friends, approaches is a bit odd. However, some experts say that the drop in bitcoin is not due to leverage itself but leverage demand.

Understanding the aforementioned statement

In simpler words, nothing extraordinary is expected. The market won’t go bang, neither will it lay down with a sigh. It’s just that short liquidation is on a high due to approaching holidays, and open interest is quite high. The demand for leveraged-long positions is very low. It has been quite a predictable scene for the crypto markets as the holidays approach. Perhaps, the bad rep that crypto markets get for being volatile and unpredictable can be repaired this holiday season.

All in all, you should liquidate if you need funds for the holidays. Otherwise, you can hold if you want to. Make sure to do your own research beforehand.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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