During this market cycle Bitcoin liquidations demonstrate lower price volatility than the extreme moves experienced in 2021. Blockchain firm Matrixport data reveals daily market liquidations of $600 million do not harm BTC prices as they maintain stability.
Matrixport analysts pointed out on Feb. 19 that market dynamics today differ greatly from 2020 and 2021 since excessive leverage caused extreme price swings. During those past years the market contained many leveraged trades yet brief selling episodes initiated automatic selling procedures that caused major shifts in price movements.
“Unlike the last bull market, where liquidations triggered extreme volatility, this time around, even with $600 million in Bitcoin and Ethereum liquidations on some days, prices are finding a bottom with minimal follow-through.”
Markus Thielen, independent analyst
Bitcoin Trading Strategies Evolve
According to Mark Thielen head of research at Matrixport leverage stands at lower levels than before. According to him participants have adapted their trading techniques by placing smaller protective stop-loss orders to limit their financial risks. BTC earned lower risk status when the SEC approved spot Bitcoin exchange-traded funds.
According to Thielen, BTC no longer serves as a high-risk investment due to low concerns about reaching zero value. The market attention now centers on measuring Bitcoin’s minimum value during periods of market decline.
The lowered leverage helps stabilize Bitcoin prices yet threats continue to exist. Analytical experts use the Inter-exchange Flow Pulse indicator to monitor BTC transfers between spot and derivatives trading platforms.
When traders shift their Bitcoin into derivatives exchanges for the future they display buying intent according to historical patterns. Many analysts now observe negative thinking about Bitcoin as shown by the indicator which implies fresh barriers for Bitcoin to advance continuously.
The trading behaviors of today point to advancing market development for Bitcoin. Investors and traders now take more structured approaches during strong market runs compared to earlier bull cycles even when forced sales occur.
The recent stability in Bitcoin price actions allows traders to observe where market forces can push Bitcoin to break from its holding points or delay its progress towards the next phase. The market behavior of investors shows Bitcoin will grow better over time despite ongoing external market changes.
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