Bitcoin leverage ratio reaches new highs

The
estimated
leverage
ratio
for
Bitcoin
(BTC)
hit
a
new
all-time
high
last
night,
according
to
CryptoQuant.
Further
metrics
point
to
growing
leveraged
interest,
but
liquidations
have
remained
relatively
low. 

According
to
on-chain
analytics
resource
CryptoQuant,
while
the
Bitcoin

price
fell
off
a
cliff

over
the
past
24
hours,
the
estimated
leverage
ratio
reached
0.224,
an
all-time
high.
The
metric
works
by
dividing
exchanges’
open
interest
by
their
coin
reserve.
The
result
shows
how
much
leverage
traders
are
using
on
average.

A
higher
ratio,
such
as
0.22,
indicates
that
more
investors
are
taking
high
leverage
risks.
Conversely,
lower
values
mean
traders
are
increasingly
risk-averse
in
their
derivative
trading.
The
blue
line
on
the
graph
below
has
trended
upwards
since
June
2019. 


Estimated
leverage
ratio
for
Bitcoin.
Source:
CryptoQuant

Most
cryptocurrency
exchanges
offer
leverage
trading,
with
FTX,

Huobi
and
Binance
leading
the
way
.
They
have
all
agreed
to
reduce
the
amount
of
leverage
available
to
traders
to
prevent
mass
liquidation
events,
such
as
the
one
seen
in
September
last
year
when

$3.5
billion
longs
and
shorts
were
liquidated.

Nonetheless,
it
hasn’t
slowed
the
plans
of
exchanges
to
bring
leverage
trading
to
a
wider
audience.
Sam
Bankman-Fried,
CEO
of
FTX
exchange, tweeted
that
his
“FTX
20x
Leveraged
Bitcoin
Index”
has
been
listed
on
the
Vienna
Stock
Exchange.

According

to
the
Wienerborse,
Austrian
daredevils
will
soon
be
able
to
access
up
to
20x
leveraged BTC
trades.



Related:




Here’s
why
Bitcoin
traders
say
a
drop
to
$38K
is
the
worst-case scenario

Meanwhile,
despite
a
circa
10%
price
drop
over
the
past
three
days,
a
mere
half
a
billion
dollars
worth
of
liquidations
took
place
across
all
exchanges, according
to
coinglass.com
data
(formerly
ByBt),
less
than
the

$600
million
worth
of
liquidations

that
took
place
in
minutes
in
March
last
year.

It’s
eery
to
observe
the
leverage
ratio
hit
all-time
highs
and
liquidations
remain
steady,
all
while
the
price
stoops
lower.
Could
more
volatility
be
in
the
cards?

Analyst
Will
Clemente

summed

it
up
adequately
in
a
tweet: “Could
still
resolve
to
the
upside.
All
I
know
for
sure
is
that
this
party
is
just
getting
started.”

read original article here