Bitcoin Price Nears $45K, Caution Persists Over Leverage Risks

Bitcoin is currently experiencing a bullish price action, breaking out of its recent rangebound trading. However the move has left many analysts cautious as it appears driven predominantly by leverage. 

Bitcoin Surges to Nearly $45K

On February 8th, the price of Bitcoin jumped by close to a thousand dollars and hit highs above $4476 as per data from TradingView.

The biggest cryptocurrency is now trading around $44,80 compared to the previous day with an increase of about 3%.

The move itself was modest in terms of percentage, but at the same time it represented a new high for Bitcoin’s price levels since almost an entire month and managed to break some stressful rangebound trading between mid-January.

Leverage Drives Latest Pump

Despite the uncertain short-term outlook, some analysts remain hopeful for further upside in it.

In a tweet, Michaël van de Poppe CEO of trading firm MN Trading pointed out that Bitcoin may price somewhere in between $48K-51k before the next halving event which is currently scheduled for April 17th.

His argument contends that a correction will follow allowing for further consolidation.

Cautious Optimism Around Halving Event

Other market players sound a more conservative note. J.A Maartunn writing for CryptoQuant contributor, an on-chain analytics platform, cautioned that the last pump was mainly fuelled by leverage where open interest grew upwards of 960 million in just under a day.

Manageable if Bitcoin stays solid, but volatility would get sharp if the prices started reversing down. In the past, large rises in open interest over brief periods of time have taken place before major price swings.

On the positive side, analysts focus on increased bid liquidity and diminishing sell-side drive that could help prevent an abrupt market turnaround.

Wrapping Up

The halving ahead is still fostering bullish predictions from some quarters with projections reaching as high as $60, 00+ sometime in mid April.

Arthur Hayes, former CEO of BitMEX also supported his theory with the statement about instability among regional U.

Although the price of Bitcoin rose significantly on February 8, it has generally been consolidating since mid-January.

While some analysts forecast further upside, especially into the halving event, leverage and the potential for sharp volatility given thin sell-side liquidity keeps others cautious about the near-term outlook.