Bitcoin Second Bull Run Looms as BTC Futures Market Becomes Overleveraged
The post Bitcoin Second Bull Run Looms as BTC Futures Market Becomes Overleveraged appeared on BitcoinEthereumNews.com.
A recent analysis suggests Bitcoin may be gearing up for the second bull run as the futures market becomes overleveraged. Ki Young Ju, the CEO of CryptoQuant, recently provided data that indicates overleveraging in the Bitcoin-Tether (BTC-USDT) futures market, which could be a precursor for massive price movements. Notably, his report assessed data from two important metrics: the BTC-USDT open interest to reserves ratio and the BTC-USDT open interest to USDT market cap ratio. Bitcoin OI to Reserves Ratio The first metric, the Open Interest to Reserves ratio, highlights how much open interest (unsettled futures contracts) exists relative to the amount of Tether (USDT) held in reserves by major exchanges. Notably, OI on exchanges recently reached an ATH above $19 billion. The ratio, which includes Ethereum- and Tron-based USDT, covers 97% of the total USDT market cap, making it highly representative of the overall market. A steady increase in this metric suggests growing leverage in the market. https://x.com/thecryptobasic Bitcoin OI to Reserves Ratio | CryptoQuant On July 29, the ratio had surged to 0.42, when Bitcoin’s price hit $70,016, as its recovery led to an uptick in BTC price. However, following the July 29 peak, it dropped alongside Bitcoin’s price, hitting a low of 0.27 in early August. Interestingly, this drop coincided with Bitcoin’s price falling to a six-month low of $49,577. This marked the end of a retracement phase. Since then, the metric has gradually recovered and now stands at 0.46. This recent recovery suggests increasing leverage as traders bet on a further rise in Bitcoin’s price. BTCUSDT OI to USDT Cap Ratio The second metric is the ratio of total BTC-USDT open interest to USDT’s market cap. This measure also reflects the level of leverage in the market and has closely tracked Bitcoin’s price movements throughout 2024. Bitcoin…
Filed under: News - @ October 17, 2024 6:26 pm