{"id":487302,"date":"2022-03-31T19:00:44","date_gmt":"2022-03-31T19:00:44","guid":{"rendered":"https:\/\/ktsl888.com\/?p=487302"},"modified":"2024-06-11T14:18:50","modified_gmt":"2024-06-11T14:18:50","slug":"bitcoin-investors-afraid-risk-leverage-remains-low","status":"publish","type":"post","link":"https:\/\/ktsl888.com\/news\/bitcoin-investors-afraid-risk-leverage-remains-low\/","title":{"rendered":"Data Shows Bitcoin Investors Afraid To Take Risk As Leverage Remains Low"},"content":{"rendered":"
On-chain data shows Bitcoin investors have been afraid to take risk recently as the leverage ratio has remained low in the last few days.<\/p>\n
As pointed out by an analyst in a CryptoQuant post<\/a>, investors haven’t taken much risk since the surge in the crypto’s price a few days back as leverage in the market is low at the moment.<\/p>\n A relevant indicator here is the “open interest<\/a>,” which shows the total amount of Bitcoin futures contracts currently open on all derivatives exchanges.<\/p>\n The “estimated leverage ratio<\/a>” is a metric that’s defined as the ratio between this open interest and the total amount of coins present on all derivatives exchanges (exchange reserve).<\/p>\n What this ratio tells us is the average amount of leverage that each Bitcoin futures investor is currently making use of.<\/p>\n When the value of the indicator is high, it means users are taking on a lot of risk right now. Such values can result in higher price volatility.<\/p>\n Related Reading |\u00a0Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation<\/a><\/em><\/strong><\/p>\n On the other hand, low values of the ratio indicate investors aren’t using much leverage currently as they look to avoid risk.<\/p>\n Now, here is a chart that shows the trend in the Bitcoin leverage ratio over the past few days:<\/p>\n <\/p>\n As you can see in the above graph, the Bitcoin leverage ratio had a high value a few days back, but the sharp uptrend in the crypto’s price brought it back down as it liquidated shorts.<\/p>\n Since then, the indicator’s value has remained at these low levels. The open interest, on the other hand, is still at a high value, implying investors have still been opening new positions in the market.<\/p>\n Related Reading |\u00a0Time To Be Fearful? Bitcoin Index Reaches Greediest Point Since Peak<\/a><\/em><\/strong><\/p>\n These new positions, however, have low average leverage attached to them as the ratio suggests. This shows that investors have been unsure about the crypto recently, opting to take less risk.<\/p>\n The chart also shows the curve for the funding rates, an indicator that tells us about the ratio of longs and shorts in the market. Currently, the metric seems to be positive, which means there are more long positions in the market.<\/p>\n At the time of writing, Bitcoin’s price<\/a> floats around $47k, up 10% in the past week. The below chart shows the trend in the price of the coin over the last five days.<\/p>\n <\/p>\n On-chain data shows Bitcoin investors have been afraid to take risk recently as the leverage ratio has remained low in the last few days. Bitcoin Leverage Ratio Remains Low In Past Few Days As pointed out by an analyst in a CryptoQuant post, investors haven’t taken much risk since the surge in the crypto’s price a few days back as leverage in the market is low at the moment. A relevant indicator here is the “open interest,” which shows the total amount of Bitcoin futures contracts currently open on all derivatives exchanges. The “estimated leverage ratio” is a metric that’s defined as the ratio between this open interest and the total amount of coins present on all derivatives exchanges (exchange reserve). What this ratio tells us is the average amount of leverage that each Bitcoin futures investor is currently making use of. When the value of the indicator is high, it means users are taking on a lot of risk right now. Such values can result in higher price volatility. Related Reading |\u00a0Glassnode’s RHODL Ratio May Suggest Bitcoin Market Is Near Capitulation On the other hand, low values of the ratio indicate investors aren’t using much leverage currently as they look to avoid risk. Now, here is a chart that shows the trend in the Bitcoin leverage ratio over the past few days: Looks like the value of the metric is low at the moment | Source: CryptoQuant As you can see in the above graph, the Bitcoin leverage ratio had a high value a few days back, but the sharp uptrend in the crypto’s price brought it back down as it liquidated shorts. Since then, the indicator’s value has remained at these low levels. The open interest, on the other hand, is still at a high value, implying investors have still been opening new positions in the market. Related Reading |\u00a0Time To Be Fearful? Bitcoin Index Reaches Greediest Point Since Peak These new positions, however, have low average leverage attached to them as the ratio suggests. This shows that investors have been unsure about the crypto recently, opting to take less risk. The chart also shows the curve for the funding rates, an indicator that tells us about the ratio of longs and shorts in the market. Currently, the metric seems to be positive, which means there are more long positions in the market. BTC Price At the time of writing, Bitcoin’s price floats around $47k, up 10% in the past week. The below chart shows the trend in the price of the coin over the last five days. BTC’s price seems to have moved sideways in the last few days | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/p>\n","protected":false},"author":542,"featured_media":487310,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3],"tags":[428,85011,1119,1144],"class_list":["post-487302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitcoin","tag-bitcoin-leverage-ratio","tag-btc","tag-btcusd"],"acf":[],"yoast_head":"\nLooks like the value of the metric is low at the moment | Source: CryptoQuant<\/a><\/pre>\n
BTC Price<\/h2>\n
BTC's price seems to have moved sideways in the last few days | Source: BTCUSD on TradingView<\/a><\/pre>\n
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com<\/pre>\n","protected":false},"excerpt":{"rendered":"