Bitcoin’s rise to $35,000 causes volumes on centralized crypto exchanges to reach highs not seen in the last two quarters.to its highest level since May 2022. The dormant crypto market became a hive of activity as the king coin soared above $35,000 on high prospects of a spot ETF approval.As a result of the price rise, a decisive shift in market sentiment was observed. The phase of low volatility and muted trading activity suddenly gave way to intense buying and selling.
As is well known, market depth refers to the number of buy and sell orders at various price levels on each side of the mid-price. The higher the market depth, the less likelihood of Bitcoin’s price getting impacted by large orders.The speculative interest for Bitcoin spiked following its most significant leap of 2023. Funding rates, representing the cost of holding bullish long or bearish short positions, for perpetual futures turned positive across exchanges.
The initial growth in OI was built on strong buying pressure, as indicated by the positive reading of the Volume Delta indicator. This period saw the opening of numerous long positions, reading from Net Longs indicator showed.However, as the uptrend was halted and BTC consolidated around the $34,000 level, the strength of buy orders started to wane. The volume delta trended towards zero and even dipped to the negative zone on a few trading days.
For the uninitiated, implied volatility gauges future expectations of price movements. Based on these observations, one should anticipate continued volatility in the short term, despite the fact that there were no substantial volatility-inducing triggers until January.Bitcoin’s bullish rally also resulted in further decoupling with tech stocks. The 30-day correlation coefficient between the king coin and NASDAQ 100 fell into the negative zone for the first time since July.
Pronounced evidence of this trend was how the equities and the crypto market reacted to the ongoing Israel-Hamas war. While stock markets felt the pinch, Bitcoin made rapid gains.Aniket is a full-time journalist at AMB Crypto. With experience in news publishing and content management, he is now increasingly tangled up in the web of cryptocurrencies and blockchains. His focus lies on the intersection between cryptos and traditional finance.