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FalconX: Liquidity Trends Indicate "Uptober" Could Mark the Beginning of a New Crypto Bull Market
In a recent article, FalconX's Chief Product Officer, Vivek Chauhan, and Research Director, David Lawant, point out that strong institutional interest and a relatively low sell-side market may suggest that we have entered a new phase in the cryptocurrency market.
Firstly, the derivatives market has shown strength, especially the Chicago Mercantile Exchange (CME), surpassing Binance as the largest holder of Bitcoin futures. The open interest in Bitcoin options has surpassed $16 billion, and the trading volume is currently at historic highs.
Secondly, the shrinking trend of sell-side orders in the Bitcoin spot market exceeds that of buy-side orders, indicating a relatively lower number of sellers compared to buyers.
Additionally, despite recent volatility picking up, the volatility of Bitcoin and Ethereum remains relatively low, below the average levels of the bull markets in 2020 and 2021. This is crucial for liquidity, as volatility typically drives an increase in trading activity. Considering volatility-adjusted figures, Bitcoin's spot trading volume is currently in the first quarter of the bull market cycle of 2020/2021.
Therefore, liquidity trends suggest that "Uptober" (referring to the upward movement in October) could signal the beginning of a new cycle in the cryptocurrency bull market. Looking ahead, despite an increased possibility of mid-term corrections and an uncertain macro environment, this rebound could mark the start of the next bull market. |
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Post time 17-11-2023 10:12:46