Meme coin boom is raging, is it another speculative bubble?

According to CoinGecko data, as of 5 a.m. on October 28, the 24H lowest price of Bitcoin was around 58,000 USD. This was the first sharp drop after Bitcoin hit a record high of 67,000 USD on October 20, and the biggest drop on the 7th. Is 13%.

The benefits of the U.S. approval of the Bitcoin futures ETF have been digested a week later. The ETF's development from news to the official listing is also the cycle of Bitcoin from 56,000 USD to 60,000 USD. Combined with market data, the decline of Bitcoin suggests that some investors have already made profits.

The market is indeed rapidly moving towards greed in the short term. One indicator is the excessive leverage of the Bitcoin market. According to the data website CryptoQuant, when Bitcoin is reaching a new high in this round of price, the estimated leverage on all exchanges is 0.175, which is close to the second highest point in history in April. At that time, the leverage continued to rise and exceeded 0.18 at one time. Bitcoin enters the downward channel. This time, when Bitcoin fell 13%, the leverage ratio had reached 0.19.

Excessive leverage implies that the market is biased toward greed, and it also shows that the market does not have the expected large amount of funds to support prices to continue upward. Another manifestation of greed is the increase in the concentration of speculative sentiment. The Meme coin that retail investors are keen on represents a surge in SHIB, which is like an indicator of a speculative market, which inevitably reminds people of the scene of Meme coin flying around before the last market crash.

High leverage blocks Bitcoin's upside

On October 27, Bitcoin, which has the largest market capitalization in the crypto asset market, fell to $58,100, which is close to its lowest level since October 15. Since hitting a record high of $67,016 on October 20, it has fallen by 13%.

Tony Sycamore, an analyst at the Australian investment platform City Index, attributed the loss of Bitcoin to "traders profiting from the recent rebound." In addition, CoinDesk analyst Omkar observed that in the bitcoin futures market, the Chicago Mercantile Exchange (CME) leveraged fund raised bitcoin bets to a record high in the week ending October 19, which may be In order to profit from the widening gap between futures and spot market prices.

Indeed, from a low of $43,000 in early October to today's $58,000, BTC's monthly increase has been close to 35%. Glassnode's recent data on the chain shows that in mid-September, during the fall of Bitcoin prices, there was a lot of accumulation on the chain. Some analysts believe that it is not surprising that some people are selling from it, stimulated by the breakthrough of new highs and a 35% increase.

From the perspective of the investment law of buying low and selling high, it is also very common for Bitcoin to fall when it reaches the top. In this round of rapid decline of more than 13%, the role and impact of "deleveraging" seems to be magnifying, because the current Bitcoin The currency leverage ratio is approaching a new high this year, and the market is showing signs of over-leveraging.

According to the data website CryptoQuant, as of October 26, the estimated leverage ratio of Bitcoin on all exchanges has reached 0.190, which is close to the highest level in November last year (0.195).

Meme coin boom is raging, is it another speculative bubble? The current estimated leverage of the Bitcoin market is 0.19

"Estimated leverage" is calculated by dividing the open interest of all exchanges by the exchange’s Bitcoin reserves, where the number of open contracts is the number of contracts that have not yet been liquidated at the end of a trading cycle, which is The most important indicator of liquidity; and since July, the exchange's bitcoin reserves have been continuously declining. This ratio essentially shows the degree of leverage of ordinary investors.

From the historical Bitcoin estimated leverage ratio, when the price rises to a certain stage, when the leverage ratio is too high, it often means that the price has peaked. CryptoQuant’s historical data shows that when Bitcoin is approaching the current round of price highs of around $67,000, the estimated leverage is 0.175, which is close to the second historical high in April. At that time, the leverage continued to rise and exceeded 0.18 at one time. The currency enters the downward channel. This time, when Bitcoin fell 13%, the leverage ratio had reached 0.19.

CryptoQuant CEO Ki Young Ju also said in an interview with Coindesk that now the market is clearly over-leveraged, "We will soon see some volatility and a lot of liquidation."

Enlarged to the general meaning of the financial market, the leverage ratio generally refers to the ratio of total assets to equity capital in the balance sheet. High leverage means that financial assets can obtain a higher return on equity under the stimulus of liquidity brought by leverage during the economic boom; however, when the market reverses, there is insufficient liquidity and excessive leverage will face a substantial decline in returns risks of.

In this general sense, this round of Bitcoin's rise does not rule out the impact of high leverage, which may imply that the amount of funds supporting the rise itself is not as large as expected, and the upside space is limited.

Speculation overheated ``SHIB leads the rise of the Meme sector''

From the evening of October 27th, in sharp contrast to the decline of Bitcoin is the uptrend of the Meme coin sector, among which Shiba Inu's ecological token SHIB is the worst.

When Bitcoin plummeted to around US$58,000, SHIB set a record high of US$0.000088 since its issuance for more than a year, with a 24-hour increase of 60%. The encrypted asset has been breaking through the previous high since last weekend, with a total market value of US$37 billion. It has surpassed DOGE, the earliest asset born in the Meme sector, and squeezed into the top ten of the crypto asset market value rankings, ranking ninth.

Meme coin boom is raging, is it another speculative bubble? Seven of the top 10 assets in the Meme sector's market capitalization showed gains during the week

The rise of SHIB against the trend also drove the Meme coin to fly. Data website Coingecko included 73 Meme coins, 31 of which were on the rise within 24 hours. The total market value of this sector was US$74.4 billion, accounting for 2.8% of the total market value of the crypto asset market.

Although the proportion is small, this proportion is the result of an increase of 13.8% in the past 24 hours, which shows the new attraction of Meme coin to market funds in the near future. Of course, SHIB took the top spot among them, becoming the crypto asset with the largest trading volume among multiple exchanges in recent days, even surpassing the trading volume of Bitcoin and Ethereum.

Starting this year, Meme coins have become a popular category in the cryptocurrency market. Most of them are created based on jokes, satires and even celebrity effects in the online social environment. For example, Dogecoin DOGE comes from the founder’s opinion Ironically, one of the reasons for the birth of Shiba coin SHIB was to combat DOGE, which has no application value. A token named Floki simply uses the name of the pet dog of Tesla founder Musk.

This type of Meme coin is often referred to as "animal coin" in the crypto circle, and the "dog concept" occupies most of it. They often use animal cartoon images as their logo. The circulation is as large as the reproduction ability of animals, and their relative value is also greater. Low. The initial price of SHIB with a circulation of 100 billion yuan was once as low as 10 decimal places. Due to the low price, Meme coin is welcomed by users with small capital. Holders look forward to gaining momentum in the market hype cycle, and speculation is obvious.

From April to May this year, DOGE continued to rise after Musk’s call, which drove various Meme currency benchmark-like price competitions, forming a "zero-zero game style", and retail market funds were in price carnival Influx in. But after the "5·12" Bitcoin crash, they also fell rapidly. Many Meme coins fell by 90% and many holders suffered losses. Investors of encrypted assets have thus reinforced the impression of regularity. In the past, the sharp rise of altcoins meant that the market peaked, but now it is the rise of Meme coin that signals the peak.

Coincidentally, this time when SHIB rose sharply, mainstream crypto assets such as Bitcoin and Ethereum entered a downward channel.

Delphi Digital analysts said in a market report released on Monday, "Dog concept coins are rising again. This has historically been a sign of overheating the market... The first time the dog concept coins went crazy from April to May this year. In September, as the cryptocurrency market cooled, it fell rapidly. In early September, this type of concept currency was once again all the rage, and the broader cryptocurrency market experienced a considerable amount of deleveraging.”

The surge in SHIB activity in such assets indicates that speculative enthusiasm may be reaching a tipping point. "The Crypto Fear and Greed Index has returned to a high level we have not seen since the beginning of March, officially marking the level of "extreme greed." Delphi Digital later said. Said in the market update analysis.

As of October 28, Bitcoin’s "Fear and Greed Index" has dropped from 82 last week’s "extreme greed" to 73 today, but it is still in the category of "greed", and the performance of Meme coin has already explained the greedy side. The alarm of overheated speculation has sounded.

According to the data website CryptoQuant, as of October 26, the estimated leverage ratio of Bitcoin on all exchanges has reached 0.190, which is close to the highest level in November last year (0.195).

Meme coin boom is raging, is it another speculative bubble? The current estimated leverage of the Bitcoin market is 0.19

"Estimated leverage" is calculated by dividing the open interest of all exchanges by the exchange’s Bitcoin reserves, where the number of open contracts is the number of contracts that have not yet been liquidated at the end of a trading cycle, which is The most important indicator of liquidity; and since July, the exchange's bitcoin reserves have been continuously declining. This ratio essentially shows the degree of leverage of ordinary investors.

From the historical Bitcoin estimated leverage ratio, when the price rises to a certain stage, when the leverage ratio is too high, it often means that the price has peaked. CryptoQuant’s historical data shows that when Bitcoin is approaching the current round of price highs of around $67,000, the estimated leverage is 0.175, which is close to the second historical high in April. At that time, the leverage continued to rise and exceeded 0.18 at one time. The currency enters the downward channel. This time, when Bitcoin fell 13%, the leverage ratio had reached 0.19.

CryptoQuant CEO Ki Young Ju also said in an interview with Coindesk that now the market is clearly over-leveraged, "We will soon see some volatility and a lot of liquidation."

Enlarged to the general meaning of the financial market, the leverage ratio generally refers to the ratio of total assets to equity capital in the balance sheet. High leverage means that financial assets can obtain a higher return on equity under the stimulus of liquidity brought by leverage during the economic boom; however, when the market reverses, there is insufficient liquidity and excessive leverage will face a substantial decline in returns risks of.

In this general sense, this round of Bitcoin's rise does not rule out the impact of high leverage, which may imply that the amount of funds supporting the rise itself is not as large as expected, and the upside space is limited.

Speculation overheated ``SHIB leads the rise of the Meme sector''

From the evening of October 27th, in sharp contrast to the decline of Bitcoin is the uptrend of the Meme coin sector, among which Shiba Inu's ecological token SHIB is the worst.

When Bitcoin plummeted to around US$58,000, SHIB set a record high of US$0.000088 since its issuance for more than a year, with a 24-hour increase of 60%. The encrypted asset has been breaking through the previous high since last weekend, with a total market value of US$37 billion. It has surpassed DOGE, the earliest asset born in the Meme sector, and squeezed into the top ten of the crypto asset market value rankings, ranking ninth.

Meme coin boom is raging, is it another speculative bubble? Seven of the top 10 assets in the Meme sector's market capitalization showed gains during the week

The rise of SHIB against the trend also drove the Meme coin to fly. Data website Coingecko included 73 Meme coins, 31 of which were on the rise within 24 hours. The total market value of this sector was US$74.4 billion, accounting for 2.8% of the total market value of the crypto asset market.

Although the proportion is small, this proportion is the result of an increase of 13.8% in the past 24 hours, which shows the new attraction of Meme coin to market funds in the near future. Of course, SHIB took the top spot among them, becoming the crypto asset with the largest trading volume among multiple exchanges in recent days, even surpassing the trading volume of Bitcoin and Ethereum.

Starting this year, Meme coins have become a popular category in the cryptocurrency market. Most of them are created based on jokes, satires and even celebrity effects in the online social environment. For example, Dogecoin DOGE comes from the founder’s opinion Ironically, one of the reasons for the birth of Shiba coin SHIB was to combat DOGE, which has no application value. A token named Floki simply uses the name of the pet dog of Tesla founder Musk.

This type of Meme coin is often referred to as "animal coin" in the crypto circle, and the "dog concept" occupies most of it. They often use animal cartoon images as their logo. The circulation is as large as the reproduction ability of animals, and their relative value is also greater. Low. The initial price of SHIB with a circulation of 100 billion yuan was once as low as 10 decimal places. Due to the low price, Meme coin is welcomed by users with small capital. Holders look forward to gaining momentum in the market hype cycle, and speculation is obvious.

From April to May this year, DOGE continued to rise after Musk’s call, which drove various Meme currency benchmark-like price competitions, forming a "zero-zero game style", and retail market funds were in price carnival Influx in. But after the "5·12" Bitcoin crash, they also fell rapidly. Many Meme coins fell by 90% and many holders suffered losses. Investors of encrypted assets have thus reinforced the impression of regularity. In the past, the sharp rise of altcoins meant that the market peaked, but now it is the rise of Meme coin that signals the peak.

Coincidentally, this time when SHIB rose sharply, mainstream crypto assets such as Bitcoin and Ethereum entered a downward channel.

Delphi Digital analysts said in a market report released on Monday, "Dog concept coins are rising again. This has historically been a sign of overheating the market... The first time the dog concept coins went crazy from April to May this year. In September, as the cryptocurrency market cooled, it fell rapidly. In early September, this type of concept currency was once again all the rage, and the broader cryptocurrency market experienced a considerable amount of deleveraging.”

The surge in SHIB activity in such assets indicates that speculative enthusiasm may be reaching a tipping point. "The Crypto Fear and Greed Index has returned to a high level we have not seen since the beginning of March, officially marking the level of "extreme greed." Delphi Digital later said. Said in the market update analysis.

As of October 28, Bitcoin’s "Fear and Greed Index" has dropped from 82 last week’s "extreme greed" to 73 today, but it is still in the category of "greed", and the performance of Meme coin has already explained the greedy side. The alarm of overheated speculation has sounded.