Bitcoins Market Dynamics and Leverage Concerns Evident in Price Decline

The recent decline in Bitcoin’s price is attributed to excessive leveraged positions and low market momentum. Analysts suggest that this downturn stems from internal market dynamics.
Contents
Leverage and Momentum Decline
Warning of Excessive Leverage in the Market
Expectations of a Supercycle in Memecoins
Future Prospects for Bitcoin and Memecoins
Leverage and Momentum Decline
On-chain analyst XBTManager indicates a decrease in Bitcoin’s cumulative volume difference (CVD), which reflects the purchasing power of retail investors on exchanges. However, the analyst notes that retail investors are not supporting rising prices and are selling at high levels. This situation implies a weakening demand for Bitcoin


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Currently, Bitcoin stands at a significant resistance level and is at a critical juncture. If it can surpass this level, it may have the potential to set a new record.
Warning of Excessive Leverage in the Market
According to CoinGecko, the spot trading volume on major exchanges fell by 14.8% in the third quarter of 2024. CryptoQuant CEO Ki Young Ju states that leverage ratios in the Bitcoin-USDT futures market have reached historical peaks. Excessive leverage is often seen as a precursor to significant price fluctuations. Analyst Axel Adler Jr suggests that surpassing a leverage ratio of 55% could lead to widespread liquidations.
Expectations of a Supercycle in Memecoins
Memecoin analyst Murad Mahmudov claims there could be a long-term growth cycle for memecoins. According to Mahmudov, the growth of these assets is driven by community support and investors chasing short-term gains. If this cycle occurs, 2025 could be a year of parabolic growth for memecoins. Currently, the market value of memecoins stands at $62 billion, having increased by 3.7% in the last 24 hours.
Future Prospects for Bitcoin and Memecoins
While Bitcoin hovers slightly above its low levels from September, the market remains unstable. Analysts consider the likelihood of a decline to support levels for Bitcoin. Meanwhile, memecoins continue to gain momentum through community support, signaling potential new opportunities for investors.
Increasing leverage ratios and weak buying pressure create uncertainty regarding Bitcoin’s short-term movements. Conversely, memecoins may be poised for a new wave of growth.
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Disclaimer:
The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.