Peak fear? Bitcoin futures leverage gets reset by this week's wild price swings
Bitcoin futures leverage is dropping steeply, indicating that traders are fearful or uncertain about the BTC price trend. The leverage used in the Bitcoin (BTC) futures market has fallen significantly in the past several days. This indicates that traders are generally uncertain about where BTC is heading in the near term.Estimated leverage on Binance. Source: CryptoQuantWhat is leverage and why is this metric crucial for Bitcoin market sentiment?In the Bitcoin futures market, traders can borrow up to 125 times of their initial capital to trade Bitcoin.This allows traders to enter into....
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Crypto analytics provider Glassnode argues the late February BTC crash may have been a healthy reset that flushed excessive leverage out of the market. According to on-chain analytics provider, Glassnode, the late-February crypto market correction may have purged excessive leverage from the markets.On March 1, Glassnode published a report analyzing the recent crypto crash — which was only the second significant crypto correction since the markets pushed into new record highs in late 2020.Glassnode noted the crash peaked with a 25% fall from the local top of $58,300 to $43,343. As such, the....
The funding rate of Bitcoin dropped to a level unseen since September 2020, signaling fear in the market. The funding rate of Bitcoin (BTC) has dropped to levels not seen since September 2020 as the price of Bitcoin plummeted below $52,000 on April 18. Quant trader and analyst Lex Moskovski says it shows fear has returned to the market.According to the data from Glassnode, the average Bitcoin futures funding rate across all exchange dropped to as low as around -0.03% on SundayWhat is funding rate and why does it dropping matter?Bitcoin futures exchanges use a mechanism called "funding" to....
Nearly $1 billion worth of Bitcoin futures contracts have been wiped out once again. Nearly $1 billion worth of Bitcoin (BTC) futures contracts were liquidated on Jan. 13, a day after the big shakeout. The continuous loop of liquidations is causing extreme volatility and large price swings in the cryptocurrency market.Total Bitcoin liquidations. Source: Bybt.comWhat are futures liquidations, and why are so many Bitcoin positions being liquidated?In the Bitcoin futures market, traders borrow additional capital to bet against or for Bitcoin. The technical term for this is leverage, and when....
Ethereum is undergoing one of the most significant resets in over a year, caused by its price breaking below $4,000. This retest has been most visible in futures open interest, where billions of dollars in positions have been wiped out across major exchanges. This rapid unwinding comes as a correction move to weeks of excessive leverage during uptrends that had pushed derivatives activity to unsustainable levels. Related Reading: When Will XRP Reach $25? Bitcoin Investor Shares A Bold Prediction Massive Open Interest Wipeout Across Major Exchanges The most recent Ethereum price correction....
A quant explains why the current high Bitcoin leverage ratio values may mean that more price drop could be coming soon. Current Bitcoin Leverage Ratio Is At High Values As explained by an analyst in a CryptoQuant post, the current BTC leverage ratio has high values, and if past pattern is anything to go by, a correction may be coming to the price soon. The “estimated leverage ratio” is an indictor that’s defined as the value of the Bitcoin open interest divided by the reserve of all exchanges. In simpler terms, what this metric tells us is the amount of leverage that an....