New Risk for Bitcoin After $21 Billion Flush: Leverage on the Rise Again

Following the clearing of speculative excesses in Bitcoin, leverage ratios in derivatives are rising once again, creating a risky outlook for investors amid weak price action.

The Bitcoin price retraced from the $120,000 levels at the end of 2025 to the $63,600 region, leading to a massive cleanup in derivatives markets. During this process, the amount of open interest fell from the $45 billion levels to $21.6 billion, confirming that the market’s overheating had ended. However, recent data shows that investors are starting to take risks again, even though prices remain significantly below their previous peaks.

Leverage Ratios Are Rising in the Bitcoin Derivatives Market

Data indicates that the estimated leverage ratio in the market has risen back to the 0.241 level, approaching its 100-day moving average. While the Bitcoin price remains structurally weak, the increasing intensity of leveraged trading on exchanges makes the market much more sensitive to sudden price movements. Especially in an environment where prices are trending low, such a rapid rise in leverage significantly triggers the risk of cascading liquidations and sharp price fluctuations in the event of a potential adverse market move.

The fact that funding rates have moved from deep negative territory into positive territory during recent recovery attempts proves that investors are shifting back toward long positions, albeit cautiously. However, short position liquidation data on the charts reveals that recent rallies have stemmed more from squeezed sellers being forced to close their positions rather than strong direct spot buying. For Bitcoin (BTC), which is currently trying to hold above the $60,000 support, the direction of the next major move will be determined by whether actual spot demand supports this increase in leverage.