Share this article
Leverage in the Bitcoin Market Is Increasing Again as $58.5K Becomes Key Level
High-leverage liquidity in bitcoin is concentrated at around $58,500, according to Hyblock Capital.
Updated Sep 12, 2024, 5:16 p.m. Published Sep 12, 2024, 10:46 a.m.
Make us preferred on Google
- Renewed bias for leverage points to increased investor risk appetite.
- High-leverage liquidity in bitcoin is concentrated at around $58,500.
- Increased leverage indicates traders taking on more risk and a possible jump in price volatility.
Leverage in the bitcoin market is growing again, a sign traders are looking to take on more risk, potentially injecting volatility into the market.
The so-called estimated leverage ratio, which divides global futures open interest by the number of coins held on exchanges, has jumped to 0.2060, the highest since October 2023, according to data tracked by analytics firm CryptoQuant.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
The increase follows a months-long consolidation below 0.20, pointing to traders increasingly using borrowed funds to amplify their futures positions and a risk-on environment. A low ratio suggests a cautious approach.
The estimated leverage ratio peaked following the collapse of Sam Bankman Fried's FTX exchange, formerly the third-largest futures trading platform in late 2022 and trended lower till December 2023.
Leverage allows traders to control larger positions with relatively little capital, magnifying both profits and losses. It's a double-edged sword that exposes traders to margin shortages and forced liquidations when the market moves against their positions, which, in turn, adds to price volatility.
"The recent increase in the Bitcoin Estimated Leverage Ratio suggests a growing trend among investors toward higher leverage in the derivatives market," CryptoQuant said in a blog post.
$58,500 is the key level
According to Hyblock Capital, high-leverage liquidity is stacked at around $58,500. So, once prices approach that level, volatility could pick up, especially because overall market liquidity remains low. That means a buy/sell order can have an outsized impact on the going market rate.
"High-leverage liquidity zones around $58,500 could drive increased volatility and create opportunities for traders as Bitcoin gravitates toward these levels," Hyblock said in an email to CoinDesk.
"Combined order book liquidity remains low, suggesting bullish potential, while the global bid-ask ratio remains positive, indicating robust underlying demand," Hyblock added.
At press time, bitcoin changed hands at around $58,000, representing a 2.5% over 24 hours, according to CoinDesk data. Ether , the second largest cryptocurrency by market value, traded 1% higher at $2,350, with an estimated leverage ratio of 0.35.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Coreweave stock gains 9% on fresh $2 billion Nvidia investment
Already an investor in CoreWeave, Nvidia last September had agreed to purchase $6.3 billion of computing services from the AI infrastructure provider.
What to know:
- CoreWeave shares jumped about 9% in pre-market trading after Nvidia invested another $2 billion in the AI-focused cloud company.
- The new funding is intended to help CoreWeave expand to more than 5 gigawatts of AI-dedicated data centers by the end of the decade.
- The deal deepens a yearslong collaboration in which Nvidia and CoreWeave will align on hardware, software and data center strategy, and test CoreWeave’s Mission Control resource-scheduling platform for potential integration into Nvidia’s ecosystem.
Top Stories
