{"id":471027,"date":"2021-09-07T19:00:17","date_gmt":"2021-09-07T19:00:17","guid":{"rendered":"https:\/\/ktsl888.com\/?p=471027"},"modified":"2024-06-11T07:44:38","modified_gmt":"2024-06-11T07:44:38","slug":"bitcoin-bearish-leverage-sell-signal","status":"publish","type":"post","link":"https:\/\/ktsl888.com\/news\/bitcoin-bearish-leverage-sell-signal\/","title":{"rendered":"Bitcoin Turning Bearish? Leverage Ratio Shows Sell Signal"},"content":{"rendered":"
The Bitcoin leverage ratio is showing a sell signal right now, indicating that the market could turn bearish, at least in the short term.<\/p>\n
As pointed out by a CryptoQuant post<\/a>, the estimated leverage ratio indicates that this might not be the best time to buy BTC.<\/p>\n The all exchanges estimated Bitcoin<\/a> leverage ratio is an indicator that’s calculated by taking the ratio of open interest divided by the reserves of all exchanges.<\/p>\n Estimated Leverage Ratio\u00a0<\/span><\/span>= <\/span><\/span>Open Interest \u00f7 Amount of Reserve<\/span><\/span>\u200b<\/span><\/span><\/span><\/span><\/span><\/span><\/p><\/blockquote>\n For those unfamiliar with futures trading, the “open interest” refers to the total number of contracts held by users at the end of a trading day. The all exchanges reserve is naturally the total amount of Bitcoin held in wallets of all exchanges.<\/p>\n The leverage ratio indicator can show how much leverage is used by a trader on average. When the value of the metric goes up, it means traders are becoming increasingly confident in their positions.<\/p>\n Related Reading |\u00a0New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course<\/a><\/strong><\/em><\/p>\n Similarly, a downtrend in the value of the indicator implies the opposite. With the help of these trends, it becomes possible to know whether traders are taking a high risk or a low risk.<\/p>\n Now, here is how the latest chart for the Bitcoin leverage ratio looks like:<\/p>\n <\/p>\n As the above graph shows, the movement of the indicator can be used to tell where the BTC price might head next.<\/p>\n Related Reading |\u00a0As Crypto Market Goes Into \u201cExtreme Greed,\u201d Is Bitcoin Set For New All-Time High?<\/a><\/strong><\/em><\/p>\n The leverage ratio moving down usually signals a good buying spot, while its value going up has suggested otherwise throughout the year.<\/p>\n Presently, the metric’s value is moving upwards, meaning it’s not a good time to buy more Bitcoin, and the coin could be observing a short-term correction soon.<\/p>\n At the time of writing, Bitcoin’s price<\/a> is around $50.9k, up 6% in the last 7 days. Over the past month, the crypto has gained 13% in value.<\/p>\n The below chart shows the trends in the price of the coin over the last three months:<\/p>\n <\/p>\n After struggling just below the $50k price range for a while, BTC seems to have finally gained some solid ground above the mark.<\/p>\n Yesterday, Bitcoin almost reached $53k in a sharp move up, but has since fallen off drastically as the price now floats below $51k.<\/p>\nThe BTC leverage ratio slightly moves up | Source: CryptoQuant<\/a><\/pre>\n
BTC Price<\/h2>\n
Bitcoin plunges down | Source: BTCUSD on TradingView<\/a><\/pre>\n