Bitcoin’s leverage ratio hits a new high

Estimated leverage of Bitcoin (Bitcoin) According to CryptoQuant’s data, it hit a record high last night. Further indicators show that the leveraged interest continues to increase, but the liquidation volume is still relatively low.

According to the on-chain analysis resource CryptoQuant, Bitcoin Prices fall off the cliff In the past 24 hours, the estimated leverage ratio reached 0.224, a record high. This indicator works by dividing the exchange’s open positions by the token reserve. The result shows how much leverage the trader uses on average.

A higher ratio, such as 0.22, indicates that more investors are taking high leverage risk. On the contrary, lower value means that traders are increasingly avoiding risks in derivatives transactions. The blue line in the chart below has been on an upward trend since June 2019.

Most cryptocurrency exchanges provide leveraged trading, using FTX, Huobi and Binance lead the wayThey all agreed to reduce the amount of leverage available to traders to prevent large-scale liquidation events, such as the one that occurred in September last year The longs and shorts of US$3.5 billion were liquidated.

Nevertheless, it does not slow down the exchange’s plan to bring leveraged trading to a wider audience. Sam Bankman-Fried, CEO of FTX Exchange, Tweet His “FTX 20x Leveraged Bitcoin Index” has been listed on the Vienna Stock Exchange. according to To Wienerborse, Austrian daredevils will soon be able to trade with up to 20 times BTC leverage.

related: This is why Bitcoin traders say that falling to $38,000 is the worst-case scenario

At the same time, although prices have fallen by about 10% in the past three days, only US$5 billion worth of liquidation has occurred on all exchanges. according to To coinglass.com data (formerly ByBt), below $600 million in liquidation This happened within a few minutes of March last year.

What is creepy is that the leverage ratio has hit a record high, the liquidation volume has remained stable, and the price has been falling. Could there be more volatility?

Will Clement sum This was fully illustrated in a tweet: “You can still decide to go up. All I know is that the party has just begun.”