After weeks of reduced volatility, cryptocurrencies like Bitcoin (BTC) are likely to see sharp price changes in the short to medium term, according to one analyst. The current situation in cryptocurrency markets could potentially generate “explosive volatility” due to massive leverage and recent low volatility, Arcane Research analyst Vetle Lunde suggested. Lunde pointed to “leverage bonanza,” or leverage going parabolic in the crypto derivatives market, while Bitcoin has continued to hover around $19,000 over the past few weeks. In crypto trading, leverage refers to using borrowed funds to make trades in order to profit bigger through contracts like perpetual swaps. …

Analysts who closely monitor traditional markets have started calling for a volatility spike in cryptocurrencies due to dire macroeconomic conditions. Signs of stress coming from credit markets took investors by surprise after the British pound hit a record low against the U.S. dollar on Sept. 26 and liquidity concerns surrounding major global banks like Credit Suisse and Deutsche Bank are boosting traders’ bearish sentiments. According to the Labor Department, unemployment in the United States reached 3.5% in September, the lowest in 43 years. Although that might sound positive at first mention, it indicates that the economy continued to overheat despite …

The Commodities Futures Trading Commission (CFTC) has sparked strong criticism from the community after filing a federal civil enforcement action against members of decentralized autonomous organization Ooki DAO over digital asset trading violations. In a Sept. 22 release, the CFTC stated that it had filed and simultaneously settled charges against the founders of decentralized trading platform bZeroX Tom Bean and Kyle Kistner for their role in “illegally offering leveraged and margined retail commodity transactions in digital assets” However, the community has kicked up a fuss over a simultaneous civil enforcement action against bZeroX’s associated Ooki DAO and its members, which …

A quick flick through Twitter, any social media investing club, or investing-themed Reddit will quickly allow one to find handfuls of traders who have vastly excelled throughout a month, semester, or even a year. Believe it or not, most successful traders cherry-pick periods or use different accounts simultaneously to ensure there’s always a winning position to display. On the other hand, millions of traders blow up their portfolios and turn out empty-handed, especially when using leverage. Take, for example, the United Kingdom’s Financial Conduct Authority (FCA) which requires that brokers disclose the percentage of their accounts in the region that …

Given the current state of the wider crypto market, some traders might be surprised to learn that Ether (ETH) has been trading in an ascending trend for the past 17 days. While the entire cryptocurrency market experienced a 10% decline on Sept. 13, Ether price held firm near the $1,570 support level. In less than 12 hours the Ethereum network is scheduled to undergo its largest ever upgrade and the possibility of extreme volatility should not be ignored. The transition to a Proof-of-Stake network will be a game changer for multiple reasons, including a 98.5% cut in energy use and …

Many traders frequently express some relatively large misconceptions about trading cryptocurrency futures, especially on derivatives exchanges outside the realm of traditional finance. The most common mistakes involve futures markets’ price decoupling, fees and the impact of liquidations on the derivatives instrument. Let’s explore three simple mistakes and misconceptions that traders should avoid when trading crypto futures. Derivatives contracts differ from spot trading in pricing and trading Currently, the aggregate futures open interest in the crypto market surpasses $25 billion and retail traders and experienced fund managers use these instruments to leverage their crypto positons. Futures contracts and other derivatives are …

Bitcoin (BTC) crashed below $19,000 on Sept. 6, driving the price to its lowest level in 80 days. The movement not only completely erased the entirety of the 32% gains accrued from July until Aug. 15, it also wiped out $246 million worth of leverage long (buy) futures contracts. Bitcoin price is down for the year but it’s important to also compare its price action against other assets. Oil prices are currently down 23.5% since July, Palantir Technologies (PLTR) has dropped 36.4% in 30 days and Moderna (MRNA), a pharmaceutical and biotechnology company, is down 30.4% in the same period. …

An $860 surprise price correction on Sept. 6 took Bitcoin (BTC) from $19,820 to $18,960 in less than two hours. The movement caused $74 million in Bitcoin futures liquidations at derivatives exchanges, the largest in almost three weeks. The current $18,733 level is the lowest since July 13 and it marks a 24% correction from the rally to $25,000 on Aug. 15. It is worth highlighting that a 2% pump toward $20,200 happened in the early hours of Sept. 6, but the move was quickly subdued and Bitcoin resumed trading near $19,800 within the hour. Ether’s (ETH) price action was …

Leveraged trading of cryptocurrencies — i.e., trading crypto with borrowed funds — comes with significant risks. This is mainly due to the capricious nature of the market. In May, the cryptocurrency market, which had grown significantly over the past couple of years, recoiled violently following a cascade of negative market events, losing over 50% of its market cap. The pullback, which caused a jarring $2 trillion market wipeout, also exposed some of the market’s biggest weaknesses. One of them was the reckless use of leverage in a market that is historically mercurial. This aspect was recently affirmed by billionaire investor …

A $750 pump on Aug. 26 took Bitcoin (BTC) from $21,120 to $21,870 in less than 2 hours. However, the movement was completely erased after comments from U.S. Federal Reserve Chair Jerome Powell reiterated the bank’s commitment to contain inflation by tightening the economy. Following Powell’s speech, BTC price dropped as low as $20,700. At Jackson Hole, Powell specifically mentioned that "the historical record cautions strongly against prematurely loosening policy." Right after those remarks, the U.S. stock market indexes reacted negatively, with the S&P 500 dropping 2.2% within the hour. On the Bitcoin chart, the affable “Bart candle,” a reference …

Since failing to close above the $2,000 mark, Ether (ETH) price has faced a steep 16.8% correction, but this was not enough to give bears an edge in the August $1.27 billion monthly options expiry. Currently there are mixed feelings about the network’s upcoming change to a proof of stake (PoS) consensus network and analysts like @DWhitmanBTC, believe the potential benefits of PoS do not supercede the absence of a supply cap and multiple changes in the monetary policy over time. uLtRaSoUnD mOnEy Is #Ethereum even money? If so, what’s the supply limit? What’s the monetary policy? How can anyone …

Bitcoin (BTC) showed weakness on Aug. 15, posting a 5% loss after testing the $25,000 resistance. The move liquidated over $150 million worth of leverage long positions and has led some traders to predict a move back toward the yearly low in the $18,000 range. The price action coincided with worsening conditions for tech stocks, including Chinese giant Tencent, which is expected to post its first-ever quarterly revenue decline. According to analysts, the Chinese gaming and social media conglomerate is expected to post quarterly earnings around $19.5 billion, which is 4% lower than the previous year. Moreover, on Aug. 16, …