Bitcoin Price Rally Is Just The Beginning As Indicators Reveal The Crypto Market Isn’t Overheating

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The overall cryptocurrency market capitalization once again surpassed $1 trillion thanks to market leaders Bitcoin and Ethereum becoming the overnight winners. After a significant decline in the bear market, the price of bitcoin began to rise.

The uptrend started after a new year in 2023, but if Bitcoin can turn a particular level into a support floor, things can get interesting. Either way, 2023 is off to a good start, as BTC is up almost 36% so far, and an overnight gain of 8% pushed the price of Bitcoin above a high. significant threshold.

Crypto market in 2023

“As for open interest and leverage ratio, they have fallen sharply since the FTX incident, and despite #Bitcoin’s recent strong rally, these two metrics still haven’t overheated at all.” by @DanCoinInvestor

Linkhttps://t.co/2JueCxIUC5

— CryptoQuant.com (@cryptoquant_com) January 21, 2023

According to a verified author for CryptoQuant, Dan Lim talked about on-chain data showing two indicators that may not be good for BTC. Dan Lim outlines two indicators that are lagging Bitcoin price in a recent analysis presented by the staff of CryptoQuant.

“As for open interest and leverage ratio, they have fallen sharply since the FTX incident, and despite #Bitcoin’s recent strong rally, these two metrics still haven’t overheated at all.”

Both metrics are still very close to multi-month lows, even though Bitcoin price has now fully recovered from the period of its fall caused by the FTX/Alameda fiasco.

It is necessary to have an active buying outlook if there is a sharp decline in Bitcoin in the future or if it renews its low point.

Mid-December marked the bottom of the overall OI, and the rebound is still in its infancy. The second indicator, the estimated leverage ratio, which represents the level of leverage that derivatives traders choose to use for their holdings, bottomed out this week but is still unable to reach the levels seen. in December 2022.

In anticipation of the US Department of Justice’s declaration of “meaningful international action on cryptocurrencies”, the two market leaders had momentarily declined. Crypto investors may feel like we have returned to the exhilarating days of the Bitcoin bull run, although we have obviously come a long way since its peak in 2021.

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