On-chain knowledge exhibits the Bitcoin leverage ratio has gone down lately as market de-risks amid macro uncertainties.
Bitcoin Leverage Ratio Sharply Falls Down Over The Previous Week
In line with the most recent weekly report from Glassnode, the BTC futures open curiosity leverage ratio has decreased within the final week as buyers de-risk their holdings.
The “futures open interest leverage ratio” is an indicator that’s outlined because the ratio between the market open contract worth and the full market cap of Bitcoin.
In easier phrases, what this metric tells us is the diploma of leverage that a median person is at the moment making use of within the BTC market.
When the worth of the ratio will increase, it means customers are growing their leverage as they tackle extra danger. Excessive values of the indicator might indicate that the Bitcoin market is overleveraged for the time being. And thus, it could be extra vulnerable to a liquidation squeeze event.
Alternatively, low values of the metric imply buyers are retaining their positions at low danger proper now. The market is mostly extra secure throughout these durations as chance of deleveraging occasions decreases.
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Now, here’s a chart that exhibits the pattern within the Bitcoin futures open curiosity leverage ratio over the previous yr:
Appears like the worth of the indicator has declined lately | Supply: The Glassnode Week Onchain - Week 7, 2022
As you’ll be able to see within the above graph, the Bitcoin leverage ratio appears to have sharply fallen off during the last seven days.
Nonetheless, not like many different deleveraging occasions over the course of 2021, this latest lower wasn’t marked by a liquidation squeeze.
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The primary push behind this pattern seems to have been buyers opting to de-risk their holdings by closing out their futures positions.
The report notes that futures customers could also be displaying this conduct in response to the various macro uncertainties at the moment looming over the Bitcoin market.
As the present values of the indicator are very near a variety that has normally meant a extra secure market, the worth of the crypto might not present a lot volatility within the coming days.
BTC Worth
On the time of writing, Bitcoin’s price floats round $44.2k, up 2% within the final seven days. Over the previous month, the crypto has gained 3% in worth.
The under chart exhibits the pattern within the value of BTC during the last 5 days.
BTC's value appears to have proven some sharp upwards momentum during the last twenty-four hours | Supply: BTCUSD on TradingView
Featured picture from Unsplash.com, charts from TradingView.com, Glassnode.com