According to BlockBeats, on September 12, leverage in the Bitcoin market grew again, indicating that traders are seeking to take more risks, which may inject volatility into the market.
The so-called “estimated leverage ratio,” the ratio of global futures open interest to the amount of currency held on exchanges, has risen to 0.2060, the highest level since October 2023, according to data from analytics firm CryptoQuant.
After several months of consolidation below 0.20, the increase suggests that traders are increasingly using borrowed funds to magnify their futures positions, and the market is showing a risk-on environment. A lower ratio generally means that traders are taking 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 declined until December 2023.
High leverage liquidity for Bitcoin is concentrated around $58,500. Therefore, once the price approaches this level, volatility is likely to increase, especially since overall market liquidity remains low. This means that buy/sell orders can have a huge impact on the prevailing market price.
