Bitcoin Bearish Signal: Leverage Ratio Spikes Up
On-chain data shows both the Bitcoin leverage ratio and the futures open interest has spiked up recently, a sign that may turn out to be bearish for the crypto’s price.
Bitcoin Estimated Leverage Ratio And Open Interest Surge Up
As pointed out by an analyst in a CryptoQuant, the BTC futures market seems to have been heating up during the past day.
To understand the leverage ratio, two other metrics need to be looked at first. They are the “open interest” and the “derivatives exchange reserve.”
The open interest is an indicator that measures the total amount of contracts currently open on the Bitcoin futures market. The metric includes both short and long positions.
The other indicator, the derivatives exchange reserve, tells us about the total number of coins currently present in the wallets of all derivatives exchanges.
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