Bitcoin Leverage Ratio Drops Sharply as Traders Reduce Risk Exposure

TLDR

• Bitcoin leverage ratio on Binance fell from 0.198 in February to 0.152 as prices declined.

• Analysts reported that traders reduced leverage as geopolitical tensions increased market uncertainty.

• Bitcoin dropped from $96,000 to $69,000 during the same period of falling leverage.

• On-chain data showed that short-term holders remain underwater while long-term holders are not selling aggressively.

• Glassnode reported modest momentum recovery but said spot trading volumes remain subdued.

Global tensions between the United States and Iran have pressured crypto markets and reduced risk appetite. Bitcoin’s Estimated Leverage Ratio on Binance has fallen sharply since February. Analysts link the decline to lower speculative activity and a broader market pullback.

Bitcoin Leverage Ratio Falls as Prices Slide

CryptoQuant analyst Darkfost reported a steep drop in the Bitcoin leverage ratio on Binance. He said traders reduced leverage as geopolitical risks increased and prices weakened.

Darkfost stated, “Periods like this are generally not favorable for risk-taking.” He added that the decline appears clearly in Bitcoin’s Estimated Leverage Ratio data.

The metric compares futures Open Interest with Bitcoin reserves held on Binance. It measures how aggressively traders use borrowed funds in derivatives markets.

The ratio has fallen from 0.198 in February to 0.152 this month. During the same period, Bitcoin dropped from $96,000 to $69,000.

Darkfost explained that lower leverage reduces systemic pressure in the market. He said this environment can stabilize price action before a new directional phase.

He added that if the ratio stays low during consolidation, spot demand may drive prices. That dynamic reflects direct buying instead of leveraged speculation.

In a separate update, CryptoQuant analyst “IT tech” highlighted growing bottom calls. He said one key metric has stayed in distress territory for 29 consecutive days.

The long-term holder to short-term holder SOPR ratio stands at 0.89. He stated, “Recent buyers are underwater.”

He also said long-term holders are not selling, yet they are not absorbing supply either. He added that short-term holder capitulation is building, but not at extremes.

“Calling a structural low here is premature,” he said. He based that view on current on-chain activity levels.

Bitcoin Rebounds as Spot Activity Remains Soft

Glassnode reported that market momentum has firmed modestly in recent sessions. The firm noted that the Relative Strength Index has lifted from recent lows.

However, Glassnode said price action still lacks a decisive bullish shift. The firm also reported subdued spot trading volumes across exchanges.

Lower spot volume points to softer participation even as conditions stabilize. That data suggests buyers have not returned in force.

Spot crypto markets climbed 4.3% in the past day to reach $2.46 trillion. The move followed comments from US President Donald Trump.

Trump said the conflict with Iran could be “over soon.” Following those remarks, oil prices fell 28% from Monday’s high of $120.

Bitcoin reclaimed the $70,000 level in early Asian trading on Tuesday. The recovery came as energy markets cooled and volatility eased.

Ether remained weak but held above the $2,000 level at the time of writing. Some altcoins posted stronger daily gains.

Hyperliquid and Zcash each surged more than 11% during the session. Trading data showed that these tokens outperformed the broader market on the day.

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