Market leverage at historic lows
Key Takeaways
- Bitcoin traders remain cautious about the potential approval of the first Bitcoin ETF in the U.S. despite impressive growth starting this year.
- Bitcoin’s Expected Leverage Ratio (ELR) near historic lows suggests declining market leverage and a cautious approach by futures traders.
- Market sentiment regarding the ETF’s approval has shifted from excitement to cautious anticipation. While some traders are uncertain about its possibilities, leading figures such as Michael Saylor see it as a pivotal development in the evolution of Wall Street.
Bitcoin traders seem to be paying attention While preparing important decisions on the horizon – potential approvals The first Bitcoin exchange-traded fund (ETF) in America.
Despite Bitcoin’s impressive performance, 200% annual growthAs we approach the close of the 2023 candle, the market appears to be depressed.
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especially, Bitcoin’s leverage metrics, specifically the Expected Leverage Ratio (ELR), are approaching historic lows., attracting attention. Analysts believe this trend is very noteworthy as there have only been two previous instances in Bitcoin history of such low ELR levels.
This suggests the following: Market leverage decreases significantlyThis indicates a conservative approach by futures market traders.
James Van Strattena research and data analyst at CryptoSlate, highlights:
This pattern was observed during two important periods. May 2021, following China’s mining ban, and November 2022, in the aftermath of the FTX collapse. In these cases, Bitcoin’s value fell until it found a new local low. This repeating sequence suggests a correlation between ELR lows and Bitcoin market value corrections.
that much market sentiment Regarding ETF approval moved. Bitcoin has had a sharp rise last month fueled by excitement, but the current mood appears to be one of: cautious expectationsThis reflects a decline in open interest in Bitcoin futures contracts, which is approaching its lowest level for the year.
The decline in Bitcoin leverage and declining interest in futures contracts contrasts with previously bullish sentiment surrounding the ETF’s approval.
Some people believed that the odds of ETF success were almost certain; The market now seems to be adopting a “wait and see” approach..
bitquanta prominent cryptocurrency analyst, said: I was surprised to see enthusiasm for ETF decisions waning.It says:
The majority are unaware that a Bitcoin ETF will be approved in 22 days, and the remaining minority do not believe it will happen even though Bitwise advertises about it.
But others are quite optimistic. michael sailorFor example, as a co-founder of MicroStrategy and a prominent Bitcoin supporter, he said the approval of a spot Bitcoin ETF was One of the most significant developments on Wall Street since the early 1990s.
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