{"id":191967,"date":"2021-03-02T06:56:48","date_gmt":"2021-03-02T03:56:48","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/leverage-traders-flushed-out-by-late-february-crypto-crash-glassnode\/"},"modified":"2021-03-02T06:56:48","modified_gmt":"2021-03-02T03:56:48","slug":"leverage-traders-flushed-out-by-late-february-crypto-crash-glassnode","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/leverage-traders-flushed-out-by-late-february-crypto-crash-glassnode\/","title":{"rendered":"# Leverage traders ‘flushed out’ by late-February crypto crash: Glassnode"},"content":{"rendered":"

“# Leverage traders ‘flushed out’ by late-February crypto crash: Glassnode <\/strong>”
\n<\/p>\n

According to on-chain analytics provider, Glassnode, the late-February crypto market correction may have purged excessive leverage from the markets.<\/p>\n

On March 1, Glassnode published a report<\/a> analyzing the recent crypto crash \u2014 which was only the second significant crypto correction since the markets pushed into new record highs in late 2020.<\/p>\n

Glassnode <\/a>noted the crash peaked with a 25% fall from the local top of $58,300 to $43,343. As such, the move was weaker than January\u2019s dip which saw a roughly 30% retracement from $42,000 to less than $30,000.<\/p>\n

The analytics provider suggested that these pullbacks are positive for the crypto markets overall, attributing the latest correction to liquidated leveraged positions held by risky speculators:<\/p>\n

\u201cSignificant market corrections are positive events in that they flush out speculation, leverage, weak hands, and test holder conviction.\u201d<\/p><\/blockquote>\n

The report added that several key market indicators were reset as BTC prices found fresh support, including futures open interest, futures funding rates, and the price premium for Grayscale\u2019s investment products.<\/p>\n

Futures open interest, which is the total number of outstanding contracts that have not been settled, dropped almost $4 billion or 22% from its peak of $18.4 billion. Glassnode also commented noted perpetual futures funding rates have also reset close to zero, which could indicate that traders are not willing to enter short positions, stating:<\/p>\n

\u201cPrevious combinations of decreasing open interest and a reset of funding rates have indicated a flush in speculative trading has occurred.\u201d<\/p><\/blockquote>\n

However, the report did note that open interest is still hovering roughly $2.5 billion above the previous peak of $3.9 billion on Feb. 21 \u2014 meaning there is still significant leverage within the market.<\/p>\n

Glassnode also noted that shares in Grayscale\u2019s Bitcoin Trust are trading at a discount compared to spot market prices for the first time ever, with investors paying a nearly 4% discount to access exposure to BTC through Grayscale\u2019s trust.<\/p>\n

It added that competing products such as Canada\u2019s Purpose ETF could diminish Grayscale\u2019s premium as more institutional products enter the market and close arbitrage opportunities.<\/p>\n

At the time of writing, Bitcoin prices were up 5.3% over the past 24 hours, with BTC currently changing hands for $49,200.<\/p>\n