Bitcoin (BTC) Leverage Easing: What Does This Mean?

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As a seasoned researcher with years of experience in the dynamic world of cryptocurrencies, I find the recent trends in Bitcoin (BTC) trading particularly intriguing. Ki Young Ju’s insights on the easing leverage in the BTC market are compelling, especially given my own experiences of navigating through the crypto market’s volatility.

Bitcoin (BTC) traders currently have increased U.S. Dollar Tether (USDT) liquidity, which means they can trade without needing high levels of leverage. This situation is demonstrated by two indicators suggesting a relaxation of leverage in the Bitcoin (BTC) derivatives market, as pointed out by CryptoQuant founder Ki Young Ju.

Bitcoin (BTC) futures OI takes breath, CryptoQuant CEO says

The largest digital currency, Bitcoin (BTC), saw a significant decrease in the number of outstanding contracts on futures trading platforms. According to a chart shared by Ki Young Ju, CEO and founder of CryptoQuant, the ratio of Bitcoin’s open interest to its reserves held by centralized exchanges (CEXes) experienced one of its sharpest declines in recent months.

The demand for leverage in the Bitcoin market appears to be decreasing.

— Ki Young Ju (@ki_young_ju) December 11, 2024

The total amount of unsettled Bitcoin-Tether futures contracts, measured in US dollars, has decreased by 7% from its highest point.

Over the last month, there’s been a 32% rise in the amount of Tether, a significant stablecoin in U.S. Dollars, held on centralized exchanges (exchanges being the common term for these platforms). This is according to the latest data available.

This pattern could potentially lower the danger of mass redemption issues (referred to as cascade liquidation risk) if a significant portion of USD Tether (USDT) holdings is directed towards futures trading.

Essentially, having larger amounts of USDT on hand means traders won’t need to borrow it for leveraged trades, which in turn lowers risks associated with the Bitcoin-USDT market.

$500 million in crypto positions erased as BTC dips below $94,500

Simultaneously, the most recent trading period proved challenging for cryptocurrency optimists, with approximately half a billion dollars worth of positions being closed (liquidated) across all pairs. Over 60% of this total was from long positions.

Today, Bitcoin (BTC) positions resulted in approximately $90 million being wiped out, whereas trading contracts on Ethereum (ETH) saw a loss of around $80 million.

The Bitcoin (BTC) Fear and Greed Index lost the Extreme Greed zone and stopped at 74/100.

Currently, at this moment, Bitcoin (BTC) is making an effort to maintain its value above $100,000 for the third occasion in its existence, following a 4.5% increase in market capitalization overnight.

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2024-12-11 19:11