Bitcoin's Shaky Ground: Leverage Fuels Short-Lived Surge
The recent surge in Bitcoin's price to $81,500 was short-lived as it fell sharply below $77,000 after Iran fired missiles at a US station in Jordan. The market capitalization of cryptocurrencies lost billions of dollars due to the massive selloff.
A closer look at the numbers reveals that the market is highly dependent on leverage and lacks clear trends or conviction. The total market value of cryptocurrencies jumped from $2.21 trillion to $2.64 trillion in just seven days, while the daily trade volume exploded to a buoyant $162 billion.
The increase in Bitcoin's price was not driven by fresh capital, but rather the reallocation of existing funds through leverage. The Crypto Fear & Greed Index hit 62, indicating a 'greedy' mood, which often predicts a gloomy future after a significant recovery.