Bitcoin market leverage grows again, with high leverage liquidity concentrated around $58,500

According to Mars Finance, leverage in the Bitcoin market has grown again, indicating that traders are looking to take on more risks, which could inject volatility into the market. According to data from the analysis company CryptoQuant, the so-called estimated leverage ratio, which is the ratio of global futures open interest to the number of coins held on exchanges, has risen to 0.2060, the highest level since October 2023. After several months of consolidation below 0.20, this increase shows that traders are increasingly using borrowed funds to amplify their futures positions, and the market presents a risk-on environment. A lower ratio generally means that traders have taken a more cautious approach. The estimated leverage ratio peaked after the collapse of SBF's FTX exchange, which was the world's third-largest futures trading platform at the end of 2022, and then the leverage ratio continued to decline until December 2023. Bitcoin's high leverage liquidity is concentrated around $58,500. Therefore, once the price approaches this level, volatility may increase, especially because overall market liquidity is still low. This means that buy/sell orders can have a huge impact on the current market price.