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Bitcoin
prices have steadied, prompting traders to reduce their leverage utilization. - Despite the price appreciation, holders remain unprofitable.
- Short positions taken against Bitcoin are higher than long positions, indicating a skeptical market sentiment.
Bitcoin’s stable prices lead to a decrease in leverage utilization by traders, but holders remain unprofitable despite the price appreciation.
Bitcoin Prices Stabilize
Bitcoin [BTC] has inspired hope amidst holders and traders alike as its price reclaimed the $64,000 levels. Over the last 24 hours, BTC has remained close to this level and has not fluctuated much.
Declining Leverage
This stability is accompanied by good news from the derivatives market, which is exhibiting signs of health. One such indicator is the significant reset in Funding Rates that occurred after the recent price drop. This reset suggests that leverage in the market may be decreasing. Adding to the positive sentiment is the fact that Open Interest as a percentage of market cap has fallen below 2%. This is the first time this has happened since February, and it is another indicator of decreased leverage in the market. Lower leverage can be seen as a sign of reduced risk, which is generally positive for the long-term health of BTC.
Market Sentiment
However, traders skewed more towards the skeptical side when it came to BTC. Coinglass’ data indicated that the percentage of short positions taken against BTC were much higher than the long positions being taken.
Holder Profitability
At press time, BTC was trading at 64,232.57, with its price having risen by 1.37% in the last 24 hours. However, the volume at which BTC was trading at had decreased by 11.18% during this period. Despite BTC’s recent surge in price, holders remained unprofitable. AMBCrypto’s examination of Santiment’s data revealed that the MVRV ratio of BTC had fallen, implying that most holders were waiting for their holdings to turn green. This may be positive for BTC in the short term as these addresses are likely to hold on to their BTC till the prices move past a certain price point.
Conclusion
While Bitcoin’s stable prices have led to a decrease in leverage utilization, the market sentiment remains skeptical with more short positions being taken against Bitcoin. Despite the price appreciation, holders remain unprofitable. The future price movement of Bitcoin will largely depend on the perspective and conviction of short-term holders.