Leverage trading usage in the crypto exchange sector is hitting new yearly highs. The behavior indicates a higher risk appetite among investors, however, it also indicates incoming volatility in the market.
The rise comes after a months-long convergence in BTC prices, suggesting that traders are taking on more risk and utilizing borrowed money to bolster their futures bets more frequently.
What Is Leverage Trading In Crypto Markets?
With leverage, dealers can trade contracts with higher values while making comparatively smaller initial deposits. As a result, traders can grow their exposure without using up more capital and benefit from higher capital efficiency.
Although trading using leverage can boost returns and buying power, it’s crucial to remember that it also amplifies possible losses and raises the risk associated with position.
Bitcoin Leverage Trading Picks Pace With Higher Prices
The increase in leverage trading comes at a time when Bitcoin prices have gone up in the past month. At the press time, Bitcoin is trading at $62,913.24, up over 1.2% as compared to the same time last day. The OG-cryptocurrency is also up over 15% in the past month, according to data from CoinMarketCap.
If Bitcoin prices continue to maintain their upward trajectory, it is likely that investors might engage in more risky and volatile trading. Additionally, the increased leverage trading occurs at a time when digital assets are benefiting from the U.S. Fed’s softer posture and poor performance of government securities.
The price of Bitcoin is predicted to rise in the upcoming month, most likely reaching $88,485 level. Bitcoin’s technical indicators show that the fear and greed index is at 50 (Neutral), indicating that the present sentiment is bullish.
Over the previous 30 days, Bitcoin saw 5.22% price volatility and 19/30 (63%) green days. Technical data also shows that Bitcoin’s 25 technical analysis indicators are indicating positive signals and 4 are indicating negative signals, indicating a generally bullish sentiment toward the future of Bitcoin.