Bitcoin News
By Sydney TheCMO
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Bitcoin's drastic price falls have primarily been associated with unfavorable market news but recent reports suggest that leveraged Bitcoin traders might also be the culprits…
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The cryptocurrency market tanked by more than 30% last week on the heels of anti-crypto statements by Chinese regulators and Elon Musk’s unfavorable sentiments on Twitter.
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Leveraged Bitcoin traders use margin trading, which means exchanges allow them to borrow funds to hold larger positions that can increase their potential earnings from each trade.
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Many traders had their margin calls triggered during the latest market crash, leading to more liquidation.
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Ryan also added that leverage tends to increase volatility in the crypto markets. He however expects the impact of leverage on the market to be less pronounced in the future…
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Recent events highlight margin trading’s negative impact on crypto gains
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Highly leveraged positions make a lot of sense in a bullish market but unfortunately, prices always experience some correction such as what we saw in the last two weeks.
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Perhaps the latest bearish performance in the last week would have been less pronounced if it were not for the fact that there were so many highly leveraged positions that were…
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The answer depends on the perspective with which you approach the cryptocurrency market. Every market has forces that determine the price of the underlying asset.
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Those who lost their money due to highly leveraged Bitcoin traders whose Bitcoin holdings were liquidated during the latest crypto crash may have a negative take on margin trading.
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Margin trading works the same way for other markets including stocks and the forex market. Forced liquidation is the Achilles heel of leverage trading, which explains the high…
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