Bitcoin’s earnings stood at $ 1.3B on September 4, up to $ 636M at press time. In the last 24 hours, the Bitcoin inflow was around 46.15k BTC, which was more than the 90-day average. The rise in exchanges has affected BTC in more ways than just a drop in price. In fact, steady flows suggest the price may remain above the $ 10,000 level for the next few weeks.
At the same time, in the last four weeks, the average BTC has dropped by 30.8k BTC. This is the largest collapse observed over a two-month period, based on the statistics of the chaliceis.
The increase in liquidity is traditionally absorbed by new buyers and institutional players. However, other factors such as the burn merchants from the Sushiwaps incident fueled more sustained demand on spot exchanges.
The SushiSwap incident reduced Defy’s market cap by almost 50%. The incident wiped out millions of people from Defy and the market, at press time, recovering from their losses. However, the full recovery may still not be on the cards as some analysts say the DFI bubble may be about to burst.
In fact, soon after the incident was reported, the price of the top Defy token fell by 90%. Following the recent sell-off at Defy, cautious traders may create new demand for bitcoin in the spot market, in hopes of a constantly rising price.
In addition, the total value locked in Defy declined by more than 10% in 10 days. If the total value lock figures fall further, traders can replace the lost value from DEFI by adding BTC to their portfolio.
This can be evident from the fact that bitcoins are being added to the network at a rate of about 6% every 10 days.
With the plumping defy market cap, this number may increase even further.
Apart from the loss of interest in DFIs, traders are also being attracted to BTC through new offerings on derivatives exchanges. Whenever the risk of accident is less than that of assets trading, the popularity of derivative products fails to gain popularity. The increase in open interest and volume on derivatives exchanges boosts the entire ecosystem and at the same time generates a parallel demand for bitcoin on spot exchanges.
Between Huobi’s bitcoin options and the Brave’s decentralized derivatives exchange, there are many new offerings for derivatives traders and this may increase investor interest.
Finally, aggregated open interest on derivatives exchanges also caused a loss of $ 5.7 billion on August 17, and could climb even higher with new product offerings. At the same time, this demand may increase in spot markets and absorb increased liquidity.
Increasing the amount of bitcoin may not affect the price in the long run. However, factors such as the falling craze in DFIs and increased trader interest on derivatives exchanges can greatly boost the demand for bitcoin on spot exchanges. Ergo, once revived, will likely sustain itself until the end of 2020.