Key Points
- Bitcoin’s Estimated Leverage Ratio hits a yearly high, indicating increased risk in trading.
- Despite breaking the $60,000 barrier, Bitcoin faces resistance with whales taking profits.
The borrowed funds, or leverage, in Bitcoin (BTC) trading have reached a yearly high, suggesting that traders are taking on more risk.
Bitcoin recently entered the $60,000 price range, but this milestone has resulted in significant pressure, with large investors taking profits and the cryptocurrency’s Estimated Leverage Ratio hitting a year-high.
Bitcoin Leverage Reaches Yearly High
Data from CryptoQuant reveals that Bitcoin’s Estimated Leverage Ratio surged to 0.216, the highest level seen this year. This metric shows the extent of borrowed funds being used in Bitcoin trading.
A rise in leverage implies increased risk for traders. If the BTC price moves contrary to these leveraged positions, it could result in large-scale liquidations and rapid price drops as leveraged positions are forcefully closed.
Furthermore, a rising leverage ratio signals potential price volatility. As more leverage enters the market, price movements, whether upward or downward, become amplified.
Bitcoin Faces Resistance Post Price Break
On 13th September, Bitcoin broke through its short-moving average, trading at around $60,543, after surging by over 4%. However, it struggled to maintain this momentum, dropping by 0.8% in the following trading session to around $60,012.
Currently trading at around $60,095, BTC’s lack of a strong follow-up suggests substantial selling pressure, with some investors taking profits after its rise.
Data from CryptoQuant indicates that Bitcoin whale addresses capitalized on the recent price surge to realize profits. When BTC broke the $60,000 barrier, the realized profits of these whales spiked, with profits reportedly exceeding $50 million.
This activity by large investors underscores the pressure on Bitcoin at this price level, potentially leading to short-term price volatility.
