On-chain data shows the Bitcoin leverage ratio has gone down recently as market de-risks amid macro uncertainties. Bitcoin Leverage Ratio Sharply Falls Down Over The Past Week According to the latest weekly report from Glassnode, the BTC futures open interest leverage ratio has decreased in the last week as investors de-risk their holdings. The “futures open interest leverage ratio” is an indicator that’s defined as the ratio between the market open contract value and the total market cap of Bitcoin. In simpler terms, what this metric tells us is the degree of leverage that an average user is currently making use of in the BTC market. When the value of the ratio increases, it means users are increasing their leverage as they take on more risk. High values of the indicator may imply that the Bitcoin market is overleveraged at the moment. And thus, it may be more prone to a liquidation squeeze event. On the other hand, low values of the metric mean investors are keeping their positions at low risk right now. The market is generally more stable during these periods as probability of deleveraging events decreases. Related Reading | JPMorgan Puts Bitcoin At $150,000 In The Long-Term, But What About Its ‘Fair Value’? Now, here is a chart that shows the trend in the Bitcoin futures open interest leverage ratio over the past year: Looks like the value of the indicator has declined recently | Source: The Gla...
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