Bitcoin Leverage Craters to Post-China Ban Lows—Is a Crash Imminent?
Bitcoin's leverage ratio just hit its lowest level since China's infamous crypto crackdown. Traders are whispering: Is this the calm before the storm?
Market mechanics flashing red
When leverage evaporates this fast, it's either extreme fear or a coiled spring. With BTC's volatility near historic lows, the smart money's betting on a violent move—but which way?
The institutional paradox
Wall Street's crypto desks keep touting 'risk management' while quietly loading up on cheap OTM options. Sound familiar? It's the 2021 playbook with 2025's bigger balance sheets.
Retail traders left holding the bag—again
Meanwhile, the Robinhood crowd's piling into leveraged altcoin ETFs like there's no tomorrow. Because for some of them, there won't be. (Cue the SEC's inevitable 'we told you so' press conference.)
Bottom line: When the leverage well runs dry, someone's about to get very rich—and it probably won't be you.
Source: CryptoQuant
Bitcoin Heading For A Big Dip?
The cryptocurrency market has faced a steep correction over the last few days. According to CoinGlass data, $623.83 million was liquidated from the crypto market over the last 24 hours.
Bitcoin (BTC) faces risks of falling below $100,000. BTC’s price has dipped 1.4% in the daily charts, 5.2% in the weekly charts, 5.5% in the 14-day charts, and 7.1% over the previous week. Despite the correction, the original crypto has rallied 57.6% since June 2024.
The market correction comes amid increased volatility arising from geopolitical tensions and trade wars. The US launched its attack on Iran, joining Israel’s cause. The MOVE has led to a substantial dip in investor sentiment. Many anticipate a prolonged bearish environment.
The Federal Reserve has also decided not to cut interest rates after its latest FOMC meeting. The decision to keep rates unchanged may have also affected Bitcoin’s (BTC) price movements.
Will The Asset Recover?
Bitcoin (BTC) is the crypto market leader. While the current market environment does not inspire confidence, there is a chance that BTC will rebound over the coming weeks.
The current ELR reading is the lowest since China banned crypto mining in 2021. One thing to remember is that the market ROSE to never-before-seen levels later that year. We could see a similar pattern emerge this time around as well if market conditions allow.
