There is now more Bitcoin Spot than Derivatives traders according to the latest observation from BitMex.
In a screengrab doing rounds on Twitter, the total trading volumes from Spot traders rose from 3% of the total Bitcoin market to a decent 8%.
Coincidentally, this follows the price capitulation of Black Thursday when Bitcoin “halved”, dropping from highs of around $7,500 to a 2020 low of $3,800.
This observation could mark a shift of trader and investor behavior.
Monitoring spot and derivative volumes.
Spot markets only had a market share of around 3% until the black thursday, and now it is a good 8% of the Bitcoin market. pic.twitter.com/lFTR1B2DLz
— CL (@CL207) March 27, 2020
However, it could also reveal that traders are wary of further degradation despite prices recovering to around $6,700.
At the time of going to press, Bitcoin was trading at $6,625 but stable in the last trading day as bulls struggle to breach the $6,500-800 resistance zone which also marks H2 2019 lows.
It is imperative that traders tread with caution.
The resistance is important and if prices tumble, BTC could drop back to $4,000 or lower.
Demand for “Real” Bitcoin
However, what observers interpret from this is that there is a real demand for Bitcoin, not the over-leveraged product at BitMex.
Because of leverage, traders searching for better profits flock to derivatives platforms like BitMex despite risk disclaimers. Also, Bitcoin is inherently volatile, but the risks are higher when over-leveraged.
With up-to 100X leverage, traders can borrow more and benefit but should price move against their prognosis, losses are equally magnified. This was noted when over $500 million was liquidated on Black Thursday.
Influx of New Traders
Meanwhile, other valid interpretation is that there is an influx of new traders looking to capitalize price gains ahead of halving.
It has been noted that in the last few days, according to data from GlassNode and reported by CoinGape, that the number of new addresses has risen by 12%.
Amid the current economic turbulence, novice traders and investors, pitched and made to see the advantages offered by a mathematics controlled system, are buying in and ramping up their crypto holdings.
This is a mark of adoption and confidence.
“BTC addresses with non-zero balances are at an all-time high. What’s more surprising is that we are even higher than when we near $20,000. Hard to not be bullish on this kind of distribution and adoption.”
$BTC addresses with non-zero balances are at an all time high. What's more surprising is that we are even higher than when we near $20,000. Hard to not be bullish on this kind of distribution and adoption. @glassnode pic.twitter.com/bNvt78C5rD
— Income Sharks (@IncomeSharks) February 21, 2020
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Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich