When analyzing bitcoin cycles, futures markets are of particular interest.
Futures provide an opportunity to bet both on an increase and a decrease in price without owning the asset itself. At the same time, most exchanges offer leverage up to x100 – a paradise for gamblers. It is the ability to place a bet without having the asset itself, and large leverage that led to the fact that the most bitcoin trade volume is made on futures, and the difference with spot volumes is usually several hundred %.
Note (red rectangle) that the whales began to eat liquidity a month before the March drop: the number of large BTC holders fell rapidly. Directly in the days of the drop, buyers were already exhausted, which worsened the already terrible fundamental situation.
In the month since the last analysis, noticeable and significant changes have occurred in the market. First of all, Mt. Gox payouts (which will crush the market one day) were postponed for 3.5 months only. It will restrain stable fundamental growth and long-term consolidation above $10,000 is very unlikely before payments are made and absorbed.
The largest exchange in its time Mt. Gox ceased to exist in February 2014. The liquidation procedure soon began and continues to this day. After all issues are resolved, a total of 137891 BTC will be paid to participants of the process. In our opinion, this event is key for the entire Bitcoin ecosystem and will greatly affect its price in the short-term (drawdown) and long-term (stable growth) perspective. Why is this so, but why almost no one talks about it? Read below.