Most analysts see the previous week’s slump as a short-term event and remain positive about Bitcoin for the rest of the year. From Gerd Weger
After it only seemed a matter of a few days or weeks before Bitcoin reached its all-time high of 65,000 US dollars in the previous week, things turned out completely different again. Even if you have seen this often with Bitcoin over the years, the intensity is always surprising. Last week, Bitcoin lost almost $ 10,000 in value in a matter of hours. Ironically, on the day when you would have expected the Bitcoin in a celebratory mood. Because on Tuesday last week it was actually introduced as legal tender in a country for the first time.
Critics will complain that this happened to El Salvador in a country of comparatively little economic importance. Nonetheless, this is a hugely important step in the further adoption of Bitcoin. Some other countries with dysfunctional currency systems are also considering this step in order to free themselves from their dependence on foreign currencies such as the dollar. According to a survey, by the way, 27 percent of US citizens would also welcome the introduction of Bitcoin as an official means of payment.
Leveraged appointment positions
After the 80 percent increase since mid-July, the mood may have been a bit too bullish recently. Analysts and market observers outbid each other with price targets. Accordingly, investors in the crypto market also increasingly took leverage positions. We have already pointed out at this point that the offers with insane levers of over 100 can lead to short-term market instabilities in an already very volatile crypto market.
The crypto exchanges and other platforms had almost competed for the highest leverage offers in the past few years. In the recent past, there has been some rethinking here, but the leveraged deadline positions have again significantly accelerated the slump in the previous week. Because with the sharp decline, many long positions were liquidated, which intensified the price slide. The extent of the leverage was not as pronounced as it was before the price slump in the spring, but according to data from the analysis company Glassnode, open interest in the futures markets fell by more than four billion dollars and thus not more than since May.
Data from the analysis tool CryptoQuant indicate that Bitcoin whales have increased their positions in the recent past. The amount of bitcoins available on the stock exchanges, which is about to hit a record low, also indicates a supply shortage and thus an imminent increase. Some Bitcoin bulls expect that this could lead to a supply squeeze with soaring prices.
Most of the big altcoins have recently been disproportionately affected by the price declines. However, there are a few exceptions. For example, Solana rose to over $ 200 at its peak.