{"id":506515,"date":"2022-10-16T17:00:20","date_gmt":"2022-10-16T17:00:20","guid":{"rendered":"https:\/\/wncen.com\/?p=506515"},"modified":"2024-06-11T14:27:35","modified_gmt":"2024-06-11T14:27:35","slug":"bitcoin-futures-market-heated-leverage-high","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/bitcoin-futures-market-heated-leverage-high\/","title":{"rendered":"Bitcoin Futures Market Remains Heated As Leverage Stays High"},"content":{"rendered":"
On-chain data shows the Bitcoin futures market has remained heated recently as leverage taken on by investors has been quite high.<\/p>\n
Following the rise in derivative activities, the leverage in the market hit a new all-tine high recently, as noted by an analyst in a CryptoQuant post<\/a>.<\/p>\n The “all exchanges estimated leverage ratio<\/a>” is an indicator that’s defined as the ratio between the open interest and the derivative exchange reserve.<\/p>\n When the value of this metric is high, it means the average investor is currently using a large amount of leverage on exchanges. Such a trend suggests holders are willing to take high risk currently.<\/p>\n On the other hand, low values of the indicator imply holders are going for a low-risk approach at the moment as they aren’t using much leverage.<\/p>\n Now, here is a chart that shows the trend in the Bitcoin all exchanges estimated leverage ratio over the last couple of years:<\/p>\n <\/p>\n As you can see in the above graph, the Bitcoin estimated leverage ratio had been rising in recent weeks and hit a new all-time just a while ago.<\/p>\n However, since then the indicator’s value has come down a bit. This decrease was instigated by the recent temporary rush of volatility in the market due to the CPI release<\/a>, which flushed out a large amount of leverage.<\/p>\n Nonetheless, the indicator’s value has remained pretty high despite the decline, meaning there is still plenty of leverage to go around in the market.<\/p>\nThe value of the metric seems to have rapidly risen during the last few weeks | Source: CryptoQuant<\/a><\/pre>\n