After a period of stagnation and bearish trend, the perpetual stock market bitcoin has seen a brief rebound in recent weeks. With traders cautiously optimistic about the near-term potential of the crypto asset, this recovery was followed by a period of elevated volatility and price consolidation.
A gradual return to the bitcoin perpetual market
Recent on-chain data shows that the bitcoin perpetual market is once again regaining its momentum, indicating positive developments around the digital asset. Market expert and host of the crypto Banter show, Kyle Doops, x.com/kyledoops/status/1848114482196734024″ target=”_blank” rel=”noopener nofollow”>shared the development of the bitcoin Perpetual Market Directional Premium metric with the crypto community on the x platform (formerly twitter).
The recent change in the key metric goes hand in hand with an improvement in market sentiment as bitcoin attempts to recover from its current consolidation phase. The brief rally reflects growing investor interest due to increased trading activity and a small increase in financing rates.
According to Kyle Doops, by mid-September, the cumulative monthly premium for long-term contracts had fallen from a high of $120 million in March to about $1.7 million, and had since only recovered slightly to $10. .8 million dollars.
Furthermore, the expert noted that this rally is still well below January 2023 levels, indicating a decline in speculative enthusiasm and a reduction in leverage. demand during market correction. However, as confidence in the asset strengthens, this brief rally could be seen as an indicator of renewed bullish momentum for bitcoin, with market conditions persistently stabilizing.
Kyle Doops also reported a notable increase in the estimated leverage ratio (ELR) in another x x.com/kyledoops/status/1847978576244592976″ target=”_blank” rel=”noopener nofollow”>mailwhich now takes into account stablecoin reserves. Specifically, this increase in the metric suggests an increased risk associated with bitcoin Derivatives.
As a result, traders should reduce risk and stay away from emotional decisions, especially during volatile conditions because the market is prone to abrupt swings.
btc maintains its renewed upward strength
bitcoin has maintained a positive trend since the digital asset saw a rally about a week ago. The renewed strength has led to growing confidence in btc's short- and long-term potential, with several analysts predicting a major rally could soon occur.
Cryptocurrency analyst and trader Milkybull recently x.com/MikybullCrypto/status/1848161231418409172″ target=”_blank” rel=”noopener nofollow”>predicted A massive rally is imminent for btc in the near term due to a bullish breakout of the Moving Average Convergence Divergence (MACD) indicator. According to the analyst, this escape is essential as it could indicate a bull run to the $120,000 price level, suggesting that the next move is about to happen.
In any case, given the potential for higher volatility In the coming days, traders and investors will be on the lookout for further confirmation of the bullish crossover while cautiously interacting with the crypto asset.
Featured image from iStock, chart from Tradingview.com
