CandleFocus

Leverage in the Bitcoin Market Is Increasing Again

The renewed bias for leverage in the bitcoin market suggests that traders are becoming more willing to take on risk, potentially leading to increased price volatility. The estimated leverage ratio, which measures the amount of borrowed funds used in futures trading, has reached its highest level since October 2023. This increase in leverage follows a period of consolidation, indicating a shift towards a risk-on environment. However, the concentration of high-leverage liquidity at around $58,500 could contribute to increased volatility, particularly due to low overall market liquidity. Currently, bitcoin is trading at around $58,000, with an estimated leverage ratio of 0.2060.

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