Bitcoin's fall compressed weaker decline levels-this could be a good thing

There is a silver lining to Bitcoin's recent price decline-it has performed poorly in the derivatives market and provides a more stable rebound gate for recent interest rate hikes.

According to CoinDesk's Bitcoin Price Index, the crypto currency with the best market value fell 3.5% on Tuesday to close at 11,100.

According to the data source Skave, long-term transactions worth approximately US$50 million (worth approximately US$50 million (futures that are about to expire)) that were forcibly excluded from listing on the cryptocurrency exchange BitMex have caused prices to fall.

skew_bitmex_xbtusd_liquidations-9

BitMex sells and dissolves (mandatory liquidation of long positions)

Source: Curve

Singapore-based QCP Capital stated in a telegram that “the move last night was positive and eliminated the weakness in foreign exchange transactions.”

"Long-term weak" is a term used to describe traders who have no confidence or resources to hold assets for a long time. Usually, it is the retail crowd who is forced to exit the market or enter low-cost waste or pumps.

After Bitcoin's latest move, the market often shook hands with the weak when the price fell temporarily, breaking through 000 12,000 strongly.

After the price drop on Tuesday, the cost of holding a permanent personal long position in Bitmex is called the "financial ratio."

The financial ratio is a mechanism used to link the price of a permanent contract to the spot price.

Higher financial ratios will prevent new investors from entering the market and prevent existing investors from increasing their long positions.

QCP Capital said: "The unsustainable high financial ratio has been pushed back to the usual base level of 11% year-on-year."

On August 18, when Bitcoin broke through 000 to 12,000, the financial ratio increased by over 60% year-on-year.

As a result, there may be strong buying pressure, leading to a retest of recent highs above 12,000.

Bitcoin is currently trading at 4,11,400.