Bitcoin increases over $ 23,000, is the rally sustainable? (Analysis)

Bitcoin increases over $ 23,000, is the rally sustainable? (Analysis)

Bitcoin has moved higher because the stock markets made more profits. The world's largest cryptocurrency after market capitalization climbed to over $ 23,000 on Tuesday. Since the beginning of the year, both Bitcoin and Ethereum have increased their course by 40 % and thus withdrawn the entire post-ftx dump.

unnecessarily to say that the continued rally against the background of last year's bloodbath and the subsequent numerous bogus rally have aroused concerns about their sustainability. However, the latest bankering report indicates that "reason to assume that this rally could have legs".

"Bears from heaven"

One of the main reasons for the Bankless it is that little indicates that the market is levered too much. In 2022 there was a great debt event when centralized infrastructures collapsed, which washed a gigantic part of debt.

The open interest on perpetual futures also recorded a clear drawdown.

Defi whales, for example, were "not particularly over-indebted". In order to trigger another event of a cascading liquidation similar to that of FTX and Covid, an "exogenous shock" would therefore be required, since it would only be $ 164 million in liquidable ETH positions over $ 1,000 about credit protocols such as maker, AAVE, Compound, Euler and others.

"Although battered actors exist like DCG, it does not indicate that the market is too lifted. In view of the enormous amount of short liquidations since the beginning of the year, it seems as if they are bears and not bulls who are on the move."

continue to measure

The positioning of investors and dealers also indicates that the rally could be sustainable. On closer inspection, it turned out that investors keep a large part of their assets in cash. Meanwhile, data from Nansen show that the percentage of large whale portfolios, which are kept in cash, is 25 %. Even when the value of its maximum of 40 % dropped, according to the report, it is still at a "historically high level".

Such a range indicates that investors are by no means completely allocated and “still has a lot of ammunition on the side” to drive up the prices.

Part of the liquidity has left the market because StableCoin decreased by over 4 % from USD $ 1 to USD 136 billion. But it seems that the remaining capital still contains a considerable amount of dry powder.

Since the asset class also reacts very sensitively to liquidity on the wider financial market, any loosening of the financial conditions could act as an interest bully sign for cryptophera prices.

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