Learn From Smart Money: BTC’s Leverage Remains High as Traders Hedge Against Downside Risks

Positive sentiment has continued to fuel the cryptocurrency market as the expectation of further institutional adoption of BTC keeps growing. Options trading of BlackRock’s Spot Bitcoin ETF IBIT debuted with a bang, attracting almost $2 billion on the first day of trading. The hope of more spot ETF derivatives to change the market structure with additional institutional money onboarding crypto is high.

In our previous edition of Market Chatter, we explored the possibility of the market being overleveraged, which could be painful if the current leverage unwinds. Data from CryptoQuant shows that the estimated leverage of the current BTC markets has reached another YTD high.

Derivatives data on Bybit shows that traders seem to expect that BTC’s momentum could slow down a bit after the price hit over $97,000, and are focusing more on downside protection.