The Bitcoin leverage ratio on Binance has experienced a notable decline, dropping from 0.198 in February to 0.152 this month. This shift coincides with a decrease in Bitcoin”s price, which fell from $96,000 to $69,000. Analysts suggest that the reduction in leverage reflects a broader trend where traders are opting to lower their exposure in the face of rising geopolitical tensions that have created uncertainty in the markets.
According to CryptoQuant analyst Darkfost, the decrease in leverage is a direct response to weakened market conditions. He emphasized that such periods are generally unfavorable for risk-taking. The Estimated Leverage Ratio, which compares futures open interest with the Bitcoin reserves held on Binance, has shown a clear downward trend since February, indicating a shift in trader behavior.
Darkfost explained that a lower leverage ratio can alleviate systemic pressure within the market, which may lead to a stabilization of price movements before a new trend emerges. He noted that if this lower ratio persists during consolidation phases, it could allow spot demand to drive prices, contrasting with the volatility associated with leveraged trading.
In a separate analysis, another CryptoQuant analyst referred to as “IT tech” highlighted ongoing distress among short-term holders, pointing to a long-term holder to short-term holder SOPR ratio of 0.89. He remarked that recent purchasers are currently facing losses, while long-term holders are refraining from selling aggressively. He warned that predicting a structural low in the market at this stage would be premature, citing the current levels of on-chain activity.
Meanwhile, Glassnode has reported a slight recovery in market momentum, with the Relative Strength Index showing improvements from recent lows. However, the firm cautioned that the price action is still lacking a definitive bullish signal. Additionally, trading volumes in the spot market remain muted, suggesting that active participation from buyers has not yet rebounded.
Despite these challenges, the overall crypto market cap briefly reached $2.46 trillion, reflecting a 4.3% increase over the previous day. This uptick followed comments from U.S. President Donald Trump about the potential resolution of tensions with Iran, which contributed to a significant drop in oil prices.
In early Asian trading, Bitcoin managed to reclaim the $70,000 mark, aided by a cooling in energy markets and reduced volatility. While Ether remained under pressure, it maintained a position above the $2,000 threshold. Notably, some altcoins, including Hyperliquid and Zcash, recorded gains exceeding 11% during the session, outperforming the overall market.
