Investors appear to be reducing their exposure to speculative assets, including stocks and cryptos, amid concerns about inflation and slower economic growth.
Gold, a traditional safe haven, traded higher on Monday, while the Chicago Board Options Exchange’s CBOE Volatility Index , a measure of the stock market’s expectation of volatility based on S&P 500 index options, rose above 20, similar to what occurred in early February.
Liquidations occur when an exchange forcefully closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin.
Still, long liquidations over the past few weeks have not reached an extreme, especially compared with early March.
The chart below shows the ratio of buy volume versus sell volume in bitcoin’s perpetual swaps market , which is a type of crypto derivative trading product.
In a Monday newsletter, FundStrat, a global advisory firm, wrote that macro uncertainty could outweigh LFG’s reserve purchases.
It appears that investors have tightened their risk budget, which is typical during times of market turbulence.
Sector classifications are provided via the Digital Asset Classification Standard , developed by CoinDesk Indices to provide a reliable, comprehensive, and standardized classification system for digital assets.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies.
As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period.