CandleFocus

Bitcoin’s leverage ratio reaches the highest level since late 2021, signals volatility ahead

Author: Content Editor
Bitcoin (BTC) reached a new price record of over $76,400 following the US election, driven by high open interest in the market. The high open interest raised concerns about the possibility of a deleveraging event and a potential price correction. The ratio of open interest to market capitalization is also at a record high, further indicating the likelihood of a deleveraging event and increased volatility. However, the market remains optimistic, with expectations of an extended bull rally for BTC in 2025. The fear and greed index for Bitcoin remains at 75 points, indicating greed among investors. The current peak price level has sparked additional optimism and is seen as the foundation for an even larger rally. Despite fears of de-leveraging, the market continues to be relatively positive, with some expecting BTC to continue its rally to new price ranges. BTC dominance remains high at 59.9%, while altcoins are lagging behind. During the latest rally, BTC saw increased trading volume with stablecoins and fiat pairs, with USDT being the most active trading pair. FDUSD, the stablecoin native to Binance, accounted for a significant portion of trading activity, and its supply has been reduced through burning. The rapid turnover of FDUSD tokens has led to suggestions of inflated volumes or wash trading.

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