Bitcoin Market Seems “Overcold,” Analyst Says

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Bitcoin continues to hover just above the $20,000 level

, Bitcoin futures are now being traded mostly by whales, which suggests that the largest cryptocurrency is currently in the middle of another accumulation cycle. Ads

As noted by Ju, people tend to trade futures with higher leverage when the cryptocurrency market gets overheated. Last month, Bitcoin-denominated futures open interest managed to reach a new peak even though volatility remains low. In fact, for the first time since 2020, the world’s largest cryptocurrency is now less volatile than the S&P 500 stock market index.

The fact that trading volumes remain consistently high sets this bearish cycle apart from the crypto winter of 2018. In late October, Arcane Research analyst Vetle Lunde suggested that the cryptocurrency market was likely to see “explosive” volatility due to growing futures open interest.

 

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