Bitcoin's price has been experiencing a downturn lately, and there are concerns about a potential crash. One reason for this concern is the upcoming US presidential election results, which could induce volatility in the financial market.¹ Additionally, Bitcoin's active addresses are 25% lower than their all-time high in March 2024, indicating a lack of investor interest.
Another factor to consider is the overleveraged positions in the futures market. The estimated futures leverage ratio for the Bitcoin/USDT perpetual market is at a new high of 270%.² This could lead to deeper liquidations if Bitcoin's price cannot maintain a daily close above $85,000.
It's also worth noting that Bitcoin's price is undergoing a price discovery phase, and spot order books are extremely thin above $73,884. This lack of support and resistance around Bitcoin's current price could contribute to a potential crash.
While it's impossible to predict with certainty, these factors suggest that a Bitcoin price crash is possible. However, it's essential to do your own research and consider multiple perspectives before making any investment decisions.