Bitcoin (BTC) Leverage Easing: What Does This Mean?

Bitcoin (BTC) traders now have larger U.S. Dollar Tether (USDT) liquidity, so they do not need to use leverage aggressively. CryptoQuant founder Ki Young Ju showcases two indicators of potential "eased leverage" for Bitcoin (BTC) derivatives.

Bitcoin (BTC) futures OI takes breath, CryptoQuant CEO says

Bitcoin (BTC), the largest cryptocurrency, experienced a rapid drop in Open Interest (OI) on futures exchanges. Per the chart published by CryptoQuant CEO and founder Ki Young Ju, BTC/USDT Open Interest to CEXes reserve ratio registered the most dramatic dip in months.

This is a culmination of two processes. BTC-USDT futures open interest (a USD-denominated volume of contracts that have not been settled yet) is down 7% from its peak.

Meanwhile, the amount of U.S. Dollar Tether (USDT), a dominant stablecoin, stored on centralized exchanges (CEXes), increased by 32% in the past 30 days, data shows.

These trends might result in reduced cascade liquidation risk if a large share of USDT deposited is allocated to futures trading. 

Simply put, with more USDT reserves in store, traders do not have to borrow it when trading with leverage. This trend reduces the risk factors in the BTC/USDT pair.

$500 million in crypto positions erased as BTC dips below $94,500

At the same time, the latest trading session was brutal for cryptocurrency bulls. In total, almost $500 million across all trading pairs were liquidated. More than 60% of this amount were longs.

Bitcoin (BTC) positions are responsible for $90 million liquidated, while Ethereum (ETH) contracts traders lost $80 million today.

The Bitcoin (BTC) Fear and Greed Index lost the Extreme Greed zone and stopped at 74/100.

As of press time, Bitcoin (BTC) is trying to stay above $100,000 for the third time in its history after a 4.5% overnight capitalization surge.