Cryptocurrency markets will see explosive volatility soon

Growing leverage and declining volatility in cryptocurrency markets are creating a situation where explosive volatility is quite possible in the short to medium term, according to Wetle Lunde, an analyst at Arcane Research.

When predicting potential volatility spikes in the short to medium term, Lunde avoided making unequivocal statements about the market's presumed movement. The analyst said that current open interest also exceeds any levels whose valuation can be determined to be sustainable. Wetle Lunde also added that the uncertainty of market signals makes it difficult to form any clear view of a reduction in the specified leverage.

Regardless of what trend emerges in the short to medium term, the Arcane Research analyst is still tuned in to the prospects of bitcoin over a longer period of time. Lunde expressed confidence that next year will bring "clarity on cryptocurrency regulation" in the United States, as well as a more stable regime of interest rates and inflation.

He also predicted further growth in the cryptocurrency market as large financial institutions such as BlackRock, Citadel and Nasdaq have recently entered the industry. He decreed: "I am confident  the show will continue and new highs will be met in the not-too-distant future".