“To Catch The Last Train”: Bitcoin’s Soar To $16,200 Leads To Record Growth In Spot Trading
The euphoria around the Bitcoin rally spurred investors in earnest because there is still a chance to jump into the last car before the 2017 high update. Could “extreme greed” in the crypto market trigger a pullback in Bitcoin’s price?
Bitcoin spot volumes updated 2020 high
Bitcoin was once again able to justify the forecasts of traders: yesterday, the crypto asset updated its annual maximum, reaching a critically important indicator of $16,200. Since the beginning of November, the price of Bitcoin has risen by 23%. If we start from the low point of the annual price of Bitcoin at $3,915 on Black Thursday, the flagship cryptocurrency has risen in price by more than 300%.
The rise in the price of Bitcoin has further spurred the interest of retail and institutional investors in buying crypto assets. According to an analysis by Arcane Research, spot Bitcoin volume has grown more than 270% over the past month. The last time we saw such a high trading volume on spot exchanges was after a massive collapse in March.
Of course, a wave of euphoria has swept the crypto market. Increased optimism is pushing many “players” to sell the asset. This trend can be clearly seen in the sharp jump in the fear and greed index. As of today, this indicator has reached “extreme greed” – the 86 mark. The last time we saw such a high value was in June 2019, when the price of Bitcoin came close to $14,000.
Experienced investors are advised not to succumb to the general excitement and not to sell Bitcoin on emotions. However, fear of loss of profits (FOMO) hangs over the crypto market, which could eventually lead to a correction in the price of Bitcoin.
Large investors are ready to “make friends” with Bitcoin
In November, the upward trend in institutional investment in Bitcoin also intensified, which has been stable at a high level for several months in a row. In particular, large investors are showing an increased interest in buying Bitcoin. It is the large investors who show an increased interest in buying Bitcoin. In particular, billionaire Stanley Druckenmiller publicly talked about his investments in Bitcoin this week.
Open interest in Bitcoin futures on CME is close to $1 billion. In October alone, this figure rose by 169%. It is noteworthy that the number of large futures holders (contracts from 25 BTC) increased by 126% compared to 2019. According to Arcane Research, it is the new entrants who have entered the crypto market amid the current surge in Bitcoin and the growing fear of lost profits that fuel the open interest in Bitcoin.
How can agiotage affect the price of Bitcoin?
A sharp increase in the number of new entrants to the cryptocurrency market may more likely lead to the overheating of Bitcoin as an asset. Despite the predominance of bullish signals on technical charts, analysts are talking about the upcoming pullback of the BTC price back. But this does not mean that the bears will return to the market. A correction in the price of a crypto asset after a parabolic rise is a completely natural scenario for a bullish cycle.