31 October 2024
The recent surge in Bitcoin price appears to align with a shift in investor behavior, according to a CryptoQuant analyst known as ‘crypto sunmoon.’
In a post on the CryptoQuant QuickTake platform, the analyst observed that the current bull market is driven by leveraged bets, particularly in derivatives markets.
This trend is noteworthy as it contrasts with past market cycles where increased deposits often accompanied BTC bull runs to spot exchanges.
Leveraged Bets’ Role in Bitcoin Price Growth
Elaborating further on leverage bets involves using borrowed funds to multiply the size of an investment. For example, with 2x leverage, a trader can open a position twice as large as their capital.
In Bitcoin futures trading, this approach can be profitable during upward price movements but also comes with risks. If the market shifts against their position, traders can face significant losses called liquidation.
The analyst notes that the inflow of Bitcoin into derivatives exchanges signals increased confidence among investors, suggesting a belief in further price gains. This confidence can create a feedback loop, where rising prices encourage additional leveraged bets, further fueling the bull market.
Bitcoin bull market begins with leveraged bets
“The bull market will continue as #bitcoin continues to be deposited into futures exchanges for leveraged bets using derivatives, rather than into spot exchanges for selling.” – By @t0_god
Link
https://t.co/1egL7L2YoO pic.twitter.com/uuQPEiSWtb
— CryptoQuant.com (@cryptoquant_com) October 30, 2024
BTC Price Performance And Outlook
With Bitcoin’s price showing an 8.2% increase over the past week, currently trading at $71,804, the role of leverage becomes increasingly relevant. Notably, BTC saw a slight retracement from its recent 24-hour high of $73,562 yet continues to maintain upward momentum.
This steady price growth and leveraged inflows signal broader investor optimism toward Bitcoin’s future price potential. According to the analyst, as long as Bitcoin continues to flow into futures rather than spot exchanges, the bullish sentiment will likely remain strong.
Notably, leveraged bets happen to be just one of the several metrics of Bitcoin, suggesting a potential continuity of the ongoing increase in price.
So far, the Stablecoin Supply Ratio Oscillator (SSRO) has seen low levels not seen since 2022. The decrease of this metric into lower levels means more stablecoins are being converted to BTC, therefore suggesting increasing demand for the asset.
Meanwhile, the technical outlook isn’t left in one of the several metrics indicating more rally for BTC’s price. Earlier today, the renowned crypto analyst Ali highlighted that historically, BTC has increased to 1.618 and 2.272 Fibonacci retracement levels.
Should the asset follow the same pattern this time, Ali predicts BTC will surge to a price between $174,000 and $462,000.
In past bull cycles, #Bitcoin has peaked between the 1.618 and 2.272 Fibonacci retracement levels. Following a similar pattern, the next $BTC top could land between $174,000 and $462,000! pic.twitter.com/KUq51Tt57z
— Ali (@ali_charts) October 30, 2024
Featured image created with DALL-E, Chart from TradingView