BlackRock's application for a spot Bitcoin exchange-traded fund (ETF) last month provided upside momentum in the cryptocurrency market.
Although Bitcoin started to rise after these news, it is currently trading below $ 30,000.
In fact, with a hard dump that came today, BTC fell below $ 29,000.
Investors Prefer Low Leverage in Futures
Investors in the perpetual futures market tied to Bitcoin remain risk-averse and avoid trading with high leverage.
Data tracked by Glassnode and Blockware Solutions shows that the open interest in BTC futures ratio to Bitcoin's market cap has been locked in a narrow range of 1.5% to 1.7% over the past four weeks.
This rate remains well below the highest level of 2.6% seen in September last year.
“Despite BTC holding the $30,000 level last month, it shows that the risk appetite of futures traders has not changed,” Blockware Solutions analysts said in a release.
“The open interest-to-market ratio remains relatively low, meaning that spot will continue to push the price up in the short to medium term as supply continues to slowly fall into the hands of long-term holders,” analysts added.
Perhaps investors do not see a Bitcoin spot ETF as a game-changer or are concerned that ongoing regulatory uncertainty will hurt their market valuation in the short term.
Another way to track leverage in the market is to divide open positions by the BTC value held in wallets linked to derivative exchange wallets.
The so-called estimated leverage, popularized by South Korea-based CryptoQuant, has remained largely stagnant since June 20, a sign that the average investor is moving safely.
In other words, the uncertainty in the market at the moment seems to make all investors nervous.
*Not investment advice.