"Bitcoin: Surge in Leverage Positions ... Potential for Further Decline"

A surge in leveraged positions on Bitcoin (BTC), coupled with capital rotation into Ethereum (ETH), has raised the possibility of further declines.

According to The Block on the 27th (local time), Vetle Lunde, Head of K33 Research, reported in a note, "The amount of open interest in Bitcoin perpetual futures has reached 310,000 BTC (about $34 billion), the highest level in two years. In the past two months alone it has increased by 41,607 BTC, and last weekend alone saw a surge of 13,472 BTC."

Lunde went on to say, "Excessive long positions are building up in a situation where the price is stagnating," and further explained, "This is a pattern similar to the large-scale liquidations that occurred in August after leverage accumulated during the summer of 2023 and 2024."

He assessed that, as the open interest peak appeared somewhat later this time, the adjustment phase could last longer. Lunde emphasized, "The risk of a short-term long squeeze has increased," and highlighted the need for conservative positioning until excessive leverage unwinds.