3 Reasons Why Key Bitcoin Metrics Are Rising Sharply Today
Bitcoin’s (BTC) price has retested the $67,252 resistance after a bearish rally in the last 24 hours that dipped the price before support at the intra-day low of $65,088. However, the BTC bullish momentum was short-lived after resistance proved too stiff to breach.
Increased Bitcoin Dominance
Bitcoin Dominance, an index that shows how much of the entire crypto market capitalization is represented by Bitcoin, has increased by 0.91% to 54.34%. This shows that more capital is being pumped into Bitcoin than into other altcoins.
Bitcoin can be seen by investors as a safer asset in the current market environment, which may be attributed to higher expectations or, conversely, a hedge against fluctuations.
The Crypto Fear & Greed Index is currently at 71, which indicates that there is a great deal of greed in the market. Often, such levels have been observed before market corrections when overly bullish investors may be brought back to earth. However, the rise in share of Bitcoin indicates that investors have a preference for the top cryptocurrency, which may be a deliberate shift in strategy.
Elevated Market Liquidity and Volume
Over the past day, the volume of Bitcoin held in exchanges has dropped by 0.06% to stand at 1.81 million BTC. This decrease means that investors move Bitcoin from exchange wallets to personal wallets, thus showing the intention to hold and not sell.
The futures volume has also increased exponentially with a rise of 149.73% to $141.79 billion. This spike may indicate that trading activity and interest in Bitcoin is picking up, which may mean higher volatility soon.
Source: Coinglass
Furthermore, 24-hour liquidation data reveals an increase of $284.48 million, which suggests that recent price fluctuations have forced many margin traders to liquidate their positions in the futures market. This is an indication of a volatile trading environment, which is usually associated with price fluctuations.
Derivatives Market and Funding Rates
The derivatives market is more active, with total options open interest and CME BTC futures open interest rising marginally. These metrics suggest that the traders are using Bitcoin for the purpose of speculation and to hedge their positions to minimize the risk.
Funding rates in Binance, Bybit, and OKX have slight differences. Funding rates are positive, which mean long positions are paying short, this means there is a bullish sentiment among the traders.
According to market analysts, Bitcoin’s 30-day realized volatility is at its lowest levels in history. However, the market has not had the drivers that could lead to significant changes and remain rather stagnant.
In the view of Paradigm, the crypto market is “slowing down” because there are no new and significant innovations. However, Bob Loukas, a trader and market analyst, has pointed out that Bitcoin is in the descending part of its daily cycle, and it could drop back to the $60,000 range before a strong bullish trend takes over.
Bitcoin Miners and Network Health
Bitcoin miners play a crucial role in the overall network health and stability. Current statistics suggest that miner activity has continued to be strong, which is beneficial to the network’s defenses and transactions. Miner revenue, comprising of block rewards and transaction fees, remains useful in meeting their running costs and encouraging more participation in the network.
Furthermore, the hash rate, which is a measure of the computational capacity of Bitcoin mining, has either held steady or risen slightly. This shows that miners have confidence in the long-term profitability of mining Bitcoin, which is a positive for the market.
Source: CoinMarketCap
At press time, the Bitcoin price was exchanging hands at $66, 608 a 0.25% surge from the intra-day low. During this rally, BTC’s market capitalization and 24-hour trading volume surged by 0.21% and 148%, respectively, to $1,311,118,412,481 and $30,245,768,049.
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