Bitcoin’s price has been consolidating for the past few days, as the flagship cryptocurrency continues to trade within the $29K price range. Despite its stellar performance in the first few months of 2023, Bitcoin seems unsure of its future direction. The vital 50-day moving average for Bitcoin, which is placed at $27,000, has provided some support for the cryptocurrency. As a result, this has led to a rally with the objective of smashing through the crucial resistance level of $30K. However, although the crypto market currently appears to be optimistic, there still remains the possibility of a rejection from this price bracket.
Bitcoin’s Price Volatility
In the early part of this week, the price of Bitcoin soared back above $30,000, which got the Bitcoin maximalists or maxis in short extremely thrilled. Unfortuitously, the marginal spike in price was quickly forgotten on news of major crypto players shifting out of the United States due to regulatory uncertainty. This led to a decline in Bitcoin’s value as it bid farewell to $30K and traded to the lower end of $26,000.
Read More: Elon Musk Unveils New Twitter Feature That Could Benefit Crypto Influencers
As things stand, Bitcoin’s recent price movement exerts weakness because the optimistic attitude does not appear to be adequate to break through the next key resistance zone. If BTC is able to successfully defend its current price level of $29K, only then a protracted fresh rally could be foreseen.
BTC Price To Drop Further?
The volume of Bitcoin Futures trading, on the other hand, is nine times more than that of Bitcoin’s Spot trading and as a result, the market has become more susceptible to changes in price. According to a prominent market expert who goes by the alias Maartunn on Twitter, pointed out that the trading volume in the futures market is approximately 900K on a daily basis, while the volume in future trading is approximately 100K.
Volatility Ahead: Ratio between Spot/Futures Volume hits an all-time high
The volume in Bitcoin Futures Trading is 9 times as high as in Bitcoin Spot Trading, making the market more responsive to price fluctuations.https://t.co/4VaXxiqOxo pic.twitter.com/pbfOQSpZP4
— Maartunn (@JA_Maartun) April 29, 2023
The primary reason for this massive disparity, as per Maartunn’s analysis, is that the Binance exchange recently disabled its zero-fee spot trading on the majority of their crypto pairs. This, in turn, has resulted in a significant decrease in the volume of spot trading on Bitcoin which throws off the ratio and causes it to be “out-of-sync”.
In addition to this, he mentions that during the times in the past when the Bitcoin dominance ratio was high in comparison to the period before it, it was roughly seven times close to the top while just once near the bottom in July 2021. In his concluding notes, he makes the bold observation that “it is guaranteed that we will see a period of extreme volatility.”
Also Read: Hong Kong Sets Sight On Stablecoins, Considers Them As National Threat
The post Bitcoin’s Price Flashes Danger Sign, Massive Volatility Ahead? appeared first on CoinGape.