The month of February saw the prices of crypto assets tread on an irresolute path. On a few hand-picked days, the market was in green, while on the remaining day’s red numbers haunted the bulls. Nevertheless, most coins ended the month on quite a high note and welcomed March with cheer.
Both Bitcoin and Ethereum managed to land up in the top gainers’ list over the past day. After appreciating by 15% in 24-hours, BTC was priced at $43.47 at the time of press. ETH, on the other hand, was trading at $2.92k after inclining by 12% in the same time period.
Owing to the flip in short-term narrative from bearish to bullish, fear from the minds of market participants was seen fading away. At the time of press, the F&G Index for both Bitcoin and Ethereum pointed to neutral readings of 51 and 53 respectively.
How confident are Bitcoin, Ethereum traders?
Even though bulls have managed to seize the past few hours, traders in the market have steered away from using high leverage.
Simply put, leverage gives traders increased buying power by allowing them to open larger positions than they would ordinarily be able to use the same amount of funds. Even though leverage provides traders with an opportunity to enhance their returns, it brings along with it commensurate financial risk and acts as a two-sided sword by amplifying the downside as much as it adds to potential gains.
So, traders usually opt for high leverage trades only when they’re are convinced about a particular trend and have a high appetite for risk.
Of late, nonetheless, the Estimated Leverage Ratio [ELR] readings for both Bitcoin and Ethereum have been suppressed when compared to their respective peaks registered in January this year.
As illustrated by the charts attached, BTC’s ELR has been hovering around 0.193 of late, while that of ETH has been beating the bush around 0.146. The said levels resonate with what had been observed back in late December last year.
Thus, at this stage, it is quite evident that traders are exercising caution and waiting for a concrete confirmation to start placing their bets yet again.