After the price of Bitcoin achieved a record peak last March, the price gradually calmed down and then began to reverse the trend, reaching its lowest level in two months at less than $60,000.
Anyone who follows the crypto market knows well that such declines and fluctuations are normal for the Bitcoin market and alternative digital currencies.
Analysts usually give a possible explanation that the sharp drop in the price of Bitcoin is sometimes due to excessive leverage, but Glassnode analyst James Cheek believes that this time the matter is completely different.
As financing rates decreased (financing rates are fees set by derivatives trading platforms to maintain a balance between the contract price and the price of the underlying asset).
The same analyst published a chart showing that the open interest (OI) of Bitcoin futures contracts has decreased from what it was last year. Open interest is the number of outstanding cryptocurrency derivatives contracts that have not yet been settled.
Which means that the current decline in the price of Bitcoin is due to various other reasons and not due to financial leverage. Currently, the price of Bitcoin has fallen to a level below $60,000 and is trading at $57,800, while the total market value of the crypto market stands at $2.16 trillion.
Posted Using InLeo Alpha