According to Jesse Powell Kraken – exchange rate of the US cryptocurrency, bitcoin ratios constantly fill the US reserve pool to open long positions.
In an interview with Tech, the CEO told Youtuber Ivan that the number of traders who believe that the price of bitcoin is higher is higher than that of those who think otherwise. This exciting sentiment has led most traders to borrow money from Crack to develop long positions in the bitcoin market. Often, the absence of short sellers – those who believe that the price of bitcoin will go down, is enough for liquidity. As a result, the margin pool is exhausted.
Cryptocurrency market traders provide traders with leverage 100 times greater than their underlying cash balance. This means, for example, that an investor can only invest 100 dollars in a single trading account with his trading account. If bitcoin moves in the direction provided by long traders, this will make a multiplier of their $ 100 position. Otherwise, he loses more than $ 100 from a dollar trading account. Overall, the upside improvement potential makes traders an attractive lever.
Powell points out that no operator is in favor of lowering Bitcoin prices, which means that most of them are paid. This feeling is an indicator that the market has a greater value for cryptocurrencies than today.
However, since leveraged transactions are mainly short-term, they can not determine the long-term bias of bitcoin. The answer to this question lies in the macroeconomy: it is the deficit in US dollars.
Travis Kling, founder and chief investment officer of cryptocomputant management company Ikigai, said in September that the global liquidity crisis was underway. A former Wall Street executive spoke about the Federal Reserve Reserve Rate Program, which allowed the US central bank to access hundreds of billions of dollars overnight. He added that investors have started to shed positions in bitcoins to get as much liquidity as possible.