According to the data from CryptoquantBitcoin’s (BTC) estimated leverage (ELR) has dropped to -0.25 for just three days. The figure represents the lowest that Elr has been since China banned mining in 2021. The sharp dip in the electricity figure signals a decline in leverage positions and open interest. The development can point to market participants who close positions to reduce risk exposure.
Bitcoin on the way to a big dip?
The Cryptocurrency market has met a steep correction in recent days. According to Tiled Data, $ 623.83 million was liquidated from the crypto market over the past 24 hours.
Market correction comes in the midst of increased volatility resulting from geopolitical tensions and trade war. The United States began its attack on Iran and joined Israel’s cause. The move has led to a significant dip in the investor’s feeling. Many predict a long -term baisse -like environment.
The Federal Reserve has also decided not to lower interest rates after its latest FOMC meeting. The decision to keep interest rates unchanged may also have affected Bitcoin (BTC) price movements.
Will the asset recover?
Bitcoin (BTC) is the crypto market leader. Although the current market environment does not inspire confidence, there is a chance that BTC will recover in the coming weeks.
The current ELR reading is the lowest since China banned crypto mining in 2021. One thing to remember is that the market rose to never before seen levels later that year. We could see a similar pattern to appear this time also if market conditions allow.