Bitcoin Traders Beware: Record BTC Futures Leverage Sets Stage for Wild Price Swings
Main Idea
Bitcoin's Estimated Leverage Ratio (ELR) spike indicates elevated risk as the market awaits a macro catalyst, with BTC hovering near record highs and altcoins eroding Bitcoin's market share.
Key Points
1. Axel Adler Jr. noted August’s 30-day change in the Estimated Leverage Ratio (ELR) exceeded +0.4 for the first time since 2020, signaling elevated risk.
2. Bitcoin briefly touched $122,000 on August 11 before reversing below $118,500, currently trading at $119,169 with a 0.4% 24-hour gain.
3. Bitcoin's market share stands at 57.5%, up slightly after dipping to 55% earlier, its lowest since January, following Ethereum’s 8% pump to $4,670.
4. Market sentiment is mixed, with CoinMarketCap’s altseason index at 37 out of 100 and Blockchain Center’s gauge at 53, indicating shifting capital flows.
Description
Bitcoin’s derivatives market is flashing its loudest warning signal in five years as traders pile into highly leveraged positions. According to analyst Axel Adler Jr., August’s 30-day change in the Estimated Leverage Ratio (ELR) went above +0.4 for the first time since 2020, a level that has historically come before periods of volatile price moves and sudden liquidations. Elevated Risk as Market Awaits Macro Catalyst The ELR spike comes with BTC hovering near record territory towards $120,000, s...
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