in Cryptocurrencies, Cryptocurrency Exchange, derivatives, Leverage, Liquidity, Predictions, Research, volatility

Crypto markets to see ‘explosive volatility’ soon: Arcane Research

by Repost Admin October 13, 2022, 10:46 am 1000 Views

Ballooning leverage and reduced volatility on crypto markets create a situation where explosive volatility is very possible in the short-to-medium term.

After weeks of reduced volatility, cryptocurrencies like Bitcoin (BTC) are likely to see sharp price changes in the short to medium term, according to one analyst.

The current situation in cryptocurrency markets could potentially generate “explosive volatility” due to massive leverage and recent low volatility, Arcane Research analyst Vetle Lunde suggested.

Lunde pointed to “leverage bonanza,” or leverage going parabolic in the crypto derivatives market, while Bitcoin has continued to hover around $19,000 over the past few weeks.

In crypto trading, leverage refers to using borrowed funds to make trades in order to profit bigger through contracts like perpetual swaps. According to Arcane, notional open interest (OI) in Bit