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December 5, 2022
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Morgan Creek Digital executive “Bitcoin causes extraordinary volatility within two days”

Virtual currency market

Bitcoin (BTC) on the 21st was 986,000 yen ($9,190), down 0.1% from the previous day.

In the cryptocurrency market, the historical lack of BTC volatility continues, but the subsequent rush and big volatility are inevitable.

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Jason Williams of the major index fund “Morgan Creek Digital” showed excitement as the end of the technical “triangular consolidation” was compared to the opening of the soccer World Cup, as record low volatility persisted. It is said that there will be “extraordinary volatility” due to a break around US 22nd (22-23rd Japan time).

Overseas trader Ethereum Jack (@BTC_JackSparrow), who analyzes changes in spot trading volume, sees a big move within the week.

Bitcoin’s rate of rise and fall per day remains at “±5%”, which is the longest level of 27 days in 21 days. It is extremely rare for the cryptocurrency market, which has higher volatility (price fluctuation) than other financial markets, to continue its low rate of decline.

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The longest battling period since the burst of the bubble was (1) 29 days from October 16th to November 13th, 2018, and the second (2) 27 days from March 6th to April 1st, 2019. After the period of ①, the BCH hash war triggered a plunge, causing a crash of about 50%. After the period of ②, it triggered the surge of about 240% to the high price.

Changes in reserve risk

Since 2019, Glassnode’s “reserve risk”, which shows investor confidence through a combination of on-chain indicators, has always been in the green zone, indicating a high degree of investor confidence.

If the market reliability is high and the BTC price is low, the reserve risk is low and the risk-on attitude is high. On the other hand, if the market reliability is low and the BTC price is high, the reserve risk is high and the risk-off attitude increases.

Reserve risk has soared since 2017, when the virtual currency bubble came. Although it reached the “red zone” at the peak of 1BTC = $20,000, it plummeted with the burst of the bubble in 2018. If the index is low, it is recommended to use the “dollar-cost averaging method,” which divides the funds and invests in equal amounts on a regular basis.

Bull Market Indicators

According to the latest data provided by CQ.Live, a virtual currency data site affiliated with CoinPost, the average withdrawal amount from the exchange is decreasing.

CQ.Live explained that the outflow (withdrawal amount) from all exchanges to be measured needs to reach a certain level as an index for the bull market to start. Specifically, it is imminent that the numerical value will be calculated as 2.35/3.5/3.5 and the result will be 2.97.

Historically, it was the perception that individual investors would be bullish if they became active, but it was a naive idea, and it was seen in bull markets in 2019 and 2017 that it reached a quantified level. It’s a pattern.

According to the results calculated using our own index, we originally thought that it would start in mid-July, but it may be slightly delayed.

ー Ki Young Ju, CEO of CQ.Live

Withdrawal amount corresponds to all issues including tether (USDT) as well as withdrawal amount of Bitcoin. In another CQ.Live, the bitcoin balance stored by the exchange itself has reached the lowest price since the beginning of the year, so the selling pressure for Bitcoin is decreasing significantly.

In general, if stocks other than stable coins on the exchange increase, selling pressure may increase, and if stable coins withdrawal increase, traders risk off (cash return) Although it is highly probable, from the past pattern, the downward trend in total withdrawals led to the subsequent upward trend.

In addition, as a warning point of selling pressure, it is known that a total of 1297 BTC (about 11.9 million dollars) was remitted to the coin base Pro on the 20th.

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