Bitcoin leverage ratio reaches new highs

Bitcoin is struggling with a bear market, but the price manages to reach new highs in its history. When will this inflate and what does it mean for the future?

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The “bitcoin leverage ratio chart” is a chart that displays the bitcoin leverage ratio. The green line on the chart represents the daily average bitcoin leverage ratio.

According to CryptoQuant, the projected leverage ratio for Bitcoin (BTC) reached a new all-time high Friday night. More indicators suggest to a rise in leveraged interest, although liquidations have remained modest. 

While the Bitcoin price has fallen off a cliff in the last 24 hours, the estimated leverage ratio has hit an all-time high of 0.224, according to on-chain analytics site CryptoQuant. The metric works by dividing the open interest of an exchange by its currency reserve. The result reveals the average amount of leverage used by traders.

A larger ratio, such as 0.22, suggests that more investors are exposing themselves to high leverage risks. Lower values, on the other hand, indicate that traders are becoming more risk conservative in their derivative trading. Since June 2019, the blue line on the graph below has been trending higher. 

Bitcoin-leverage-ratio-reaches-new-highsBitcoin’s leverage ratio is estimated. CryptoQuant is the source of this information.

Leverage trading is available on most cryptocurrency exchanges, with FTX, Huobi, and Binance leading the way. They’ve all agreed to limit the amount of leverage available to traders in order to avoid large-scale liquidations like the one that occurred in September of last year, when $3.5 billion in longs and shorts were liquidated.

Nonetheless, it hasn’t halted exchanges’ attempts to make leverage trading more accessible to the general public. The CEO of the FTX exchange, Sam Bankman-Fried, announced on Twitter that his “FTX 20x Leveraged Bitcoin Index” had been listed on the Vienna Stock Exchange. Austrian daredevils will soon have access to up to 20x leveraged BTC trading, according to the Wienerborse.

Here’s why Bitcoin traders believe a plunge below $38K would be the worst-case scenario.

Meanwhile, despite a 10% price reduction in the previous three days, according to coinglass.com statistics (formerly ByBt), just half a billion dollars worth of liquidations took occurred across all exchanges, much less than the $600 million worth of liquidations that took place in minutes in March last year.

It’s strange to see the leverage ratio reach new highs and liquidations stay stable, all while the price falls. Is it possible that the market will become much more volatile?

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In a tweet, analyst Will Clemente put it up well. “There’s still a chance it’ll work out in your favor.” “All I know for sure is that this celebration has just just begun.”

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The “bitcoin prices history” is a chart that shows the price of Bitcoin over time. It’s shown in US dollars and it has been trending upwards since its inception.

Related Tags

  • btc: all exchanges estimated leverage ratio
  • cryptoquant
  • what is one bitcoin worth
  • why did bitcoin spike
  • will cryptocurrency crash

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