Crypto analyst warns of “extreme price fluctuations” in BTC

This is indicated by a sharp increase in the leverage ratio

20.06.2023 - 12:00

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What’s new? A blockchain analyst under the nickname Crazzyblockk has warned that amid the outflow of liquidity from centralized exchanges (CEXs) and increased leverage in the futures markets, the likelihood of “extreme price fluctuations” in bitcoinis growing. According to him, this is evidenced by a sharp increase in the leverage ratio used by traders when the price of the cryptocurrency rises.

Information on the CryptoQuant website

Estimated Leverage Ratio, ELR is the ratio of open interest to the exchange’s reserve. The metric shows how much leverage is used by traders on average. In case of a sharp increase in leverage on the crypto market, volatility is possible.

Analysts’ observations. In early June, Fidelity Investments’ global macro director Jurrien Timmer compared the alternating bullish and bearish cycles in the crypto market to the dot-com bubble of the early 2000s. He said that BTC may survive the crypto winter and take market share away from other digital assets.

As of June 20, 12:15 UTC, bitcoin price chart at $26 916, having gained 1,88% in 24 hours. Weekly growth, according to aggregator CoinGecko, amounted to 3,1%.

According to experts at Santiment, a combination of falling cryptocurrency prices and growing concerns about the effects of lawsuits by the US Securities and Exchange Commission (SEC) against the Binance and Coinbase exchanges led to a drop in trader sentiment to its most negative level since March 2020.

Нападки на Binance, Coinbase и альткоины. Как SEC кошмарила рынок на этой неделе

Подробно рассказываем о последних действиях Комиссии по ценным бумагам и биржам США, которые оказали значительное влияние на крипторынок

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In turn, Glassnode found that the SEC’s lawsuits against the platforms had a greater impact on institutions compared to smaller organizations. The experts analyzed investor behavior between June 5 and June 12.

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