[Analysis] Binance leverage ratio highest in a month…"Possibility of increased Bitcoin volatility"

An analysis found that in the Bitcoin (BTC) market, the leverage ratio has risen even during a price downturn, increasing volatility risk.

On the 15th (local time), an analyst at Arabchain said in a CryptoQuant QuickTake report that "Binance's estimated Bitcoin leverage ratio rose to 0.204, marking the highest level in the past month." He pointed to the fact that leveraged positions remain intact even though Bitcoin's price has recently dropped to the $96,000 level as a concern.

The analyst explained, "The trend of the leverage ratio rising during price decline periods has repeatedly led to long squeezes in the past," adding, "If leverage accumulates without a price rebound, the market structure becomes fragile and a small selling pressure can trigger a sharp drop."

He added, "During the mild rally in July–August, the leverage ratio actually decreased, but currently positions are not being liquidated despite the price decline," and added, "It appears that excessive leverage liquidations have not yet been completed."

He also said, "If high levels of leverage persist, short-term volatility may increase in either sharp declines or sharp rises," and forecasted, "The market's future direction depends on how it absorbs leveraged positions that have high inflows of liquidity."