Bitcoin price drop clears overbonders from the market

According to on-chain analytics provider Glassnode, the correction in the crypto market at the end of February cleared the excess borrowers from the markets.

Glassnode analyzed the second correction seen since the bull market, which started at the end of 2020, in a report published on March 1.

Bitcoin, which declined from $ 58,300 to $ 43,343, experienced a 25 percent correction. This correction is small compared to the correction that passed 30 percent, when Bitcoin fell from $ 42k to $ 28k in January.

The source of analysis suggested that these retractions are generally good for the crypto market, and the recent correction was due to the liquidation of leveraged positions held by speculators:

“The speculation of major market corrections are positive events as they clean the over-borrowers and weak hands and test the confidence of the savings.”

The report stated that with the Bitcoin price finding new support, some key market indicators such as open positions in futures, funding rates and the price premium of Grayscale’s investment products were also reset.

The futures market’s open positions, which refer to contracts that have not yet been terminated, fell 22 percent, or almost $ 4 billion, after reaching an all-time high of $ 18.4 billion. Glassnode stated that the funding rates of perpetual futures contracts were also zeroing to zero, indicating that investors were not willing to take short positions:

“The reduction of open positions and the zeroing of funding rates indicate a cleanup in speculative trading.”

Bitcoin, which has gained 2 percent value in the last 24 hours, is being traded at $ 48,690 as of the time of translation publication.

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