Bitcoin And Risk Off Asset
The features of a risk-off asset have been shown by the crypto king. Over the course of the last three days, we have observed strong upward momentum as investors look for safety. Bitcoin was in serious need of rebranding itself as a secure haven and an alternative to the established international financial system. It has come to our attention that there is a significant amount of interest in bitcoin, and it would seem that this boom will continue even if a number of prominent crypto banks have shut their doors. The beauty of bitcoin is that it is not too reliant on this, which is another of its strengths.
Because of the collapse of the SVB, it is possible that some chief financial officers would now look to bitcoin as a means of diversifying their risks. Bitcoin has once again shown its capacity to withstand any form of uncertainty, which is why this is the case.
In addition, there is a demonstrated historical record of investors favouring stable currencies over bitcoin, which indicates that this preference may soon be reversed. People are now aware that bitcoin is the most revolutionary financial innovation ever created since it is the most secure and transparent digital currency available.
Strictly speaking, the barrier of 25K is anticipated to maintain the growing momentum in check, and if this barrier is broken, then the door will be opened to the next level, which is 30K.
Is The Top or Bottom In?
On Monday, more than $100 million worth of short positions, sometimes known as wagers against an increase in prices, were closed off. This was the greatest sum that has been liquidated since January 14, when a rise in bitcoin prompted numerous crypto futures to lose a total of $500 million due to liquidation.
According to statistics provided by Coinglass, due to the liquidations that took place on Monday, 78% of all bitcoin futures traders incurred losses. The cryptocurrency exchanges that were most affected by the losses were Binance, OKX, Huobi, and Bybit.
When an exchange cancels a trader’s leveraged position forcibly because the trader has lost some or all of their original margin, this is referred to as a liquidation of the trader’s position. When a trader is unable to fulfil the margin requirements for a leveraged position, this event takes place (fails to have sufficient funds to keep the trade open).
Massive liquidations may be a leading indicator of the local peak or bottom of a sharp price move, which can provide traders with the opportunity to position themselves appropriately.