Summary of Bitfinex Analysis
- Bitcoin is in a transitionary phase with lower leverage, fewer short-term speculators, and less volatile price action.
- The Estimated Leverage Ratio and Implied Volatility metrics suggest that Bitcoin may be entering an era of lower volatility.
- The crypto community has responded with mixed reactions to the prediction.
Bitfinex Predicts New Era of Stability for Bitcoin
Bitcoin, the world’s most popular cryptocurrency, has been experiencing extreme volatility lately. But according to a recent report by cryptocurrency exchange Bitfinex, this may soon change. The report suggests that Bitcoin may be entering a new era of stability and lower volatility in the coming weeks.
What Does the Report Say?
Bitfinex analysts suggest that Bitcoin is in a “transitionary phase” with lower leverage, fewer short-term speculators, and less volatile price action. This analysis is supported by two key metrics: the Estimated Leverage Ratio and Implied Volatility.
Estimated Leverage Ratio Measurements
< p > The Estimated Leverage Ratio measures leverage in the Bitcoin market , which dropped to a low of 0 . 195 last week – a reading not seen since December 2021 . This drop in leverage coincided with a 12 % crash in Bitcoin’s price , from $ 56 , 500 to $ 49 , 500 . Implied volatility , on the other hand , has dipped to near – historical lows set earlier this year , ranging between 48 % and 55 % for seven , 30 , 90 , and 180 – day expiries . ( source : CryptoQuant , Bitfinex )
< h2 > Implication For the Crypto Market
< p > Moreover , the decrease in leverage and implied volatility suggests a possible return to an era dominated by the spot market , similar to early 2021 . This could mean that Bitcoin’s price may be less volatile in the coming weeks . However , it is important to note that this is just a prediction