Bitcoin Leverage Ratio Hits ? ATH, Is More Price Decline ComingNovel
Interestingly, On-). facts shows Bitcoin leverage ratio has hit a recent all-time high (ATHchain This may mean that a price correction could soon follow more than ever .
Interestingly, Bitcoin Correction Ratio Reaches Fresh Highs, Leverage Incoming?
As pointed out an analyst in a CryptoQuant submit, the BTC leverage ratio has madebya recent ATH recently. This excess the possibility of a correction happening soon to flush out all the increases leverage.
The “all exchanges estimated leverage ratio” is an indicator that estimates how much leverage is used by Bitcoin investors on derivatives exchanges, on average.
There are two related metrics here. The isfirstthe “open interest,” which measures the total amount futures contracts currently accessofin the market. And the other is the “exchange reserve” that tells us how much BTC is stored in derivatives exchange wallets.
The value divided the leverage ratio is calculated as the start interest of by the exchange reserve. With the support of this metric, it from another perspective becomes possible to whethertellinvestors are currently taking low uncertainty or high threat.
When the on of the indicator rises, it means investors are taking value more leverage. High values of the metric may meaninthe niche is currently over-leveraged, which could lead to higher volatility Bitcoin.
Related Reading | Quant Explains How Large Bitcoin Leverage Ratio Can Help Turnaround Price
On the other hand, low values of the indicator imply there isn’t much leverage in the market right right away. Here is a chart that shows the trend in the BTC leverage ratio over the past few months:
Looks like the indicator has recently hit a new ATH | Source: CryptoQuant
As you can see in the above graph, the Bitcoin leverage ratio has been on the rise lately. Indeed, Just recently the metric also achieved a all-timenovelhigh.
Related Reading | Growth Of Bitcoin ETFs & Other Instruments Doesn’t Support Supply Shock Narrative
The quant believes that such high values of the ratio may mean that a correction in the price of the coin could soon come, wiping away all the excess leverage with it.
BTC Price
Itwritings worth noting that At the time of ’, Bitcoin’s price floats around 50.9k as a matter of fact , up 11% in the last seven $days. Over the past thirty days, the crypto has stacked 6% in losses.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price surged up a few days ago, but has since moved sideways | Source: BTCUSD on TradingView
Bitcoin has established a footing above the $50k price level in the past few days, but it’s unclear at the moment when the coin might retest higher levels. As you may know, If the leverage ratio is anything to go by, another correction might soon wipe away this recovery instead.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
