- On-chain data suggests a dominant influence of leveraged Bitcoin derivatives on its price.
- A staggering 98% of the volume is driven by Tether and insiders, overshadowing genuine investor activity.
- The looming potential of a massive market shake-up as this dynamic becomes unsustainable.
Bitcoin, the poster child of the cryptocurrency world, is no stranger to price volatility. But recent on-chain data has thrown light on some startling revelations about the forces behind these price gyrations.
Read CRYPTONEWSLAND on
google news
A deep dive into the numbers indicates that Bitcoin’s price isn’t predominantly driven by the typical ebb and flow of investor sentiment. Instead, it’s being majorly swayed by leveraged paper Bitcoin derivatives. These derivatives, interestingly, are mostly collateralized by stablecoins like Tether (USDT), many of which appear to be created without adequate backing – essentially, “out of thin air.”
Such a situation prompts questions about the actual investor participation in the market. The data suggests that genuine investors, those buying Bitcoin as a store of value or for its potential future utility, constitute a mere 2% of the volume. In contrast, a whopping 98% is manipulated by activities tied to Tether and insiders, casting shadows on the market’s transparency and integrity.
This over-reliance on Tether, combined with the undercurrents of leveraged derivatives, sets the stage for potential vulnerabilities. Many experts believe that the current dynamics are a house of cards, which, when it falls, will result in a market event of monumental proportions. While the specifics of the fallout are yet to be ascertained, the consensus is clear – many in the crypto space are unprepared for the aftershocks.
It’s a reminder for all participants to tread carefully, conduct due diligence, and remain alert to the intricate web of market forces at play.
Recommended News :
disclaimer read moreCrypto News Land (cryptonewsland.com) , also abbreviated as “CNL”, is an independent media entity — we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.
