Analysts Say That Bitcoins True Rally Has Not Started
In the last few weeks, Bitcoin has been taken over entirely by the bulls as it has made a surge of up to 70% in the crypto market. This movement has put the leading digital assets firmly in the lead to become the best performing macro asset for this year.
According to analysts and experts in the market, the bulls might eventually decide to rest soon. When it happens, Bitcoin will undergo a much-needed price correction in the coming weeks. While some analysts have seen this period as a volatile period, others have said it is an expected move for the crypto. While analysts are still arguing this, a volatility analyst in the crypto space has noted that volatility is yet to begin in the Bitcoin market.
Bitcoin has not shown the usual market properties for a bull market
Anyone that followed Bitcoin’s market trend in the last two months will know that the digital asset has gone way over the parabolic. Despite this, the market has not shown the usual properties that the bull market shows; sharp surge and decline of the coin in the market. According to Mohit Sorout, Bitcoin’s recent technical reading shows that the coins volatility index has declined and is about to touch the multi-year low figure. This is coming when the coin saw massive gains of around 70% in the crypto market in the space of two months.
Furthermore, the analyst noted that if the expected volatility comes back into the market, it is safe to say that the recent bull run is just the beginning. According to a recent update by a trader in the market, the current happenings in the derivatives market are causing low volatility in the FTX market, and it could be here to stay. To back up his claims, he said that Bitcoin has been moving away from exchanges in droves while a limited number of retail investors are sending their crypto to exchanges. This shows that the market’s selling pressure is decreasing and could cause strong downtrends in the bull markets.
Trader says BitMEX contributed to the decline in volatility
According to the Trader, high-value traders and other prop trading desks have contributed to the decrease in volatility. A typical example he mentioned was prop trading desks that entered the crypto space through BitMEX. The prop trading desks had one goal in mind: t fully utilize spread trading and market-making on incomplete order books. According to the trader, another thing that has influenced how traders work in the crypto space is the declining dominance of BitMEX in the market in the last few years.
Notably, BitMEX uses a BTC margin model that uses Bitcoin to open long contracts while other exchanges use USDT to open long contracts. BitMEX’s structure has been one of the factors that have contributed to the volatility downtrends. This is made possible because users are allowed to post more in their collateral than in USDT contracts.