Key takeaways:
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Open curiosity in Bitcoin futures and choices has ballooned to $96 billion, up sharply from 2022 ranges.
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Elevated speculative leverage fuels BTC’s bullish breakouts, but it surely additionally raises the danger of cascading liquidations, paying homage to 2021 volatility.
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Stablecoin-margined collateral now dominates over crypto-margined positions, serving to mitigate volatility shocks amid heightened buying and selling exercise.
Bitcoin’s derivatives market, which instructions $96.2 billion in open curiosity (OI), is poised to form worth dynamics every time BTC trades close to all-time highs. Whereas Bitcoin (BTC) OI is presently down from a $114 billion peak, it nonetheless dwarfs its 2022 ranges.
Glassnode identified that the introduction of US spot Bitcoin ETFs in January 2024 accelerated this pattern. In 2023, open curiosity fluctuations have been comparatively tame, however post-ETF, 30-day adjustments have grown extra risky, reflecting a market more and more pushed by leveraged trades.
The Realized Cap Leverage Ratio, now at 10.2%, ranks among the many prime 10.8% of buying and selling days since 2018, signaling heightened speculative exercise that would proceed to drive worth motion as Bitcoin hovers close to all-time highs.
This might amplify Bitcoin’s worth potential, driving fast rallies previous key resistance ranges at $111,800 and boosting liquidity, as noticed in Binance futures information, the place most dealer participation thrives.
As illustrated, in Might 2025, Binance achieved a outstanding milestone, recording $1.7 trillion in futures buying and selling quantity, the best month-to-month determine in 2025. This surge in exercise alerts a sturdy wave of market hypothesis and engagement, considerably contributing to Bitcoin’s bullish momentum initially of Q2.
But, this similar leverage carries warning. The chance of cascading liquidations nonetheless looms giant, doubtlessly triggering sharp worth drops, as witnessed within the 2021 crash fueled by risky crypto-margined positions.
Nevertheless, Glassnode famous that the market reveals indicators of maturity. For the reason that 2022 FTX collapse, stablecoin-margined collateral has overtaken crypto-margined positions, now dominating open curiosity. This shift reduces collateral volatility, providing a buffer towards market shocks.
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BTC-USDT futures leverage ratio factors to volatility
Information from CryptoQuant indicated that the BTC-USDT futures leverage ratio with respect to open curiosity is slowly growing close to its peak from early 2025. This confirms the elevated leveraged market issues outlined above, with Bitcoin shifting sideways above $100,000 for over a month.
Likewise, crypto analyst Boris Vest identified that merchants are getting ready to maneuver in both path. The analyst famous that whereas brief positions proceed to extend on Binance, the ratio between lengthy and brief is kind of balanced, as inferred from the traditional funding charges. The dealer mentioned,
“Throughout the $100K–$110K vary, most merchants are leaning towards brief positions. This will increase the possibilities of a transfer in the other way. It’s potential that bigger gamers are quietly accumulating on this zone.”
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This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer includes danger, and readers ought to conduct their very own analysis when making a call.