The post Bitcoin’s Leverage Ratio Drops Sharply appeared on BitcoinEthereumNews.com. Home » Crypto News Excess leverage in crypto markets has virtually dissappearedThe post Bitcoin’s Leverage Ratio Drops Sharply appeared on BitcoinEthereumNews.com. Home » Crypto News Excess leverage in crypto markets has virtually dissappeared

Bitcoin’s Leverage Ratio Drops Sharply

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Excess leverage in crypto markets has virtually dissappeared which could result in a healthier spot-based market recovery, say analysts.

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Summarize with AI


Summarize with AI

Global tensions, particularly the Iran-US conflict, have rattled crypto markets and pushed investors away from risk-taking.

The metric measures the intensity with which investors use leverage and is calculated by comparing the futures Open Interest (OI) with the amount of BTC reserves held on the exchange. Since February, this ratio has fallen sharply from 0.198 to 0.152 — coinciding with Bitcoin dropping from $96,000to $69,000.

A Healthier Market Dynamic

If the ratio remains low while Bitcoin consolidates, it likely signals that spot buying rather than leveraged speculation is becoming the dominant price driver, which is a generally healthier dynamic.

In a separate post, CryptoQuant analyst “IT tech” said that “bottom callers are multiplying.” One metric just hit 29 consecutive days in distress territory, they added, highlighting the Bitcoin long-term holder-to-short-term holder SOPR ratio, which is at 0.89.

Meanwhile, Glassnode reported on Monday that momentum has “firmed modestly,” with RSI lifting from recent lows, “but price action still lacks the strength of a decisive bullish shift.”

Crypto Market Outlook

Spot markets have climbed 4.3% on the day to reach $2.46 trillion in a move that follows US President Trump’s comments that the war with Iran could be “over soon.” Bitcoin reclaimed $70,000 in early trading in Asia on Tuesday as oil prices tanked 28% from Monday’s high of $120.

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Ether remained weak, but it was holding above the $2,000 level at the time of writing. Meanwhile, some altcoins were seeing larger gains, including Hyperliquid and Zcash, which surged more than 11% each.

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Source: https://cryptopotato.com/bitcoins-leverage-ratio-drops-sharply-is-a-healthier-market-reset-underway/

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