Major Warning Sign? Bitcoin Estimated Leverage Ratio Spikes On 4 Exchanges

Source Bitcoinist

On January 12, Maartunn, a community on-chain analyst at CryptoQuant, issued a significant cautionary note when he posted on X, Bitcoin “Estimated Leverage Ratio spikes on 4 Major Exchanges.” The exchanges highlighted in his analysis—Gate.io, Bybit, HTX Global, and Deribit—have all exhibited distinctly higher levels of the Estimated Leverage Ratio (ELR), a measure described as open interest in Bitcoin futures divided by exchange reserves. According to Maartunn, this spike may suggest an “overheated futures market” or “unusually low exchange reserves.”

Bitcoin Investors Need To Know This

Gate.io is the first exchange showing an alarming rise in ELR, spurred by a notable ramp-up in open interest. Data shared by Maartunn indicates that open interest soared from approximately $1.5 billion to $6.4 billion in just 30 days. Historical patterns point to Gate.io regularly displaying high ELR figures between November 2021 and October 2022, covering the span from Bitcoin’s record peak to the depths of the 2022 bear market, at which point the metric finally stabilized. That stabilization now appears to have reversed course, raising questions about renewed risk-taking on the platform.

Bybit is equally notable and has long stood out for consistently maintaining an ELR above 1 for more than two consecutive years. In his remarks, Maartunn referenced what he calls “Bybit-apes,” a term describing traders who gravitate toward substantial leverage. Such behavior, while familiar to Bybit’s user base, heightens the risk of sudden and sharp swings in Bitcoin’s price.

HTX Global, formerly Huobi, has also experienced a swift jump in open interest, climbing from around $150 million to $3 billion in less than a year. This figure, while suggesting a rise in the platform’s overall popularity, has not been matched by an equivalent uptick in exchange reserves, which Maartunn called “odd.” He implies that without a parallel build-up in reserves—whether in Bitcoin or stablecoins—the leverage increase might signal a larger imbalance.

Deribit, the fourth exchange in focus, has shown a spike that Maartunn considers less relevant, given what he believes could be an unlabeled internal address skewing the ELR data. While the exchange is known for its robust options market, he suggests that the elevated values do not appear to stem from the same widespread high-leverage trading behaviors seen at Gate.io, Bybit, or HTX Global.

Maartunn stresses that the intention behind his analysis is not to foment fear, uncertainty, and doubt, but to provide data that can guide prudent decision-making. “To start, this isn’t about spreading FUD—I’m simply sharing data and thoughts for you to consider. Use this information to guide your own decisions,” he wrote, pointing to the lessons many in the crypto community learned after FTX’s collapse.

He also explains that it can be wise to minimize funds stored on exchanges due to potential counterparty risks, advises caution when engaging in leveraged trades—especially when ELR values are high—and recommends favoring exchanges such as Binance, BitMEX, Kraken, Bitfinex, and OKX, which currently exhibit healthier ELR figures.

At press time, BTC traded at $90,768.

Bitcoin price
Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Best Stock to Buy Right Now: Nike vs. AppleNike (NYSE: NKE) and Apple (NASDAQ: AAPL) are often considered stable blue chip stocks for conservative investors. They're two of the most iconic American brands, they have plenty
Author  The Motley Fool
7 hours ago
Nike (NYSE: NKE) and Apple (NASDAQ: AAPL) are often considered stable blue chip stocks for conservative investors. They're two of the most iconic American brands, they have plenty
placeholder
Gold already at 11% return for 2025 with more tariffs coming, Fed Powell’s testimony eyedGold’s price (XAU/USD) has set another record high at $2,942 in early Tuesday trading before paring back nearly all the incurred gains for the day.
Author  FXStreet
7 hours ago
Gold’s price (XAU/USD) has set another record high at $2,942 in early Tuesday trading before paring back nearly all the incurred gains for the day.
placeholder
Pound Sterling faces pressure as BoE Mann guides dovish monetary policy outlookThe Pound Sterling (GBP) weakens against its major peers in European trading hours on Tuesday after a dovish commentary from Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann in an interview with the Financial Times (FT) earlier in the day.
Author  FXStreet
9 hours ago
The Pound Sterling (GBP) weakens against its major peers in European trading hours on Tuesday after a dovish commentary from Bank of England (BoE) Monetary Policy Committee (MPC) member Catherine Mann in an interview with the Financial Times (FT) earlier in the day.
placeholder
Bitcoin Whales Continuously Selling, But This Cohort Is BuyingOn-chain data shows the Bitcoin whales have been distributing for a while, but this investor cohort has been scooping up their coins. Bitcoin Sharks Have Increased Their Supply Dominance Recently In a new post on X, analyst James Van Straten has discussed about how the Supply Dominance of the various Bitcoin cohorts has recently changed. […]
Author  Bitcoinist
9 hours ago
On-chain data shows the Bitcoin whales have been distributing for a while, but this investor cohort has been scooping up their coins. Bitcoin Sharks Have Increased Their Supply Dominance Recently In a new post on X, analyst James Van Straten has discussed about how the Supply Dominance of the various Bitcoin cohorts has recently changed. […]
placeholder
GBP/USD: Downward momentum can lead to GBP edging lower – UOB GroupTentative buildup in downward momentum could lead to Pound Sterling (GBP) edging lower; the major support at 1.2310 is unlikely to come into view.
Author  FXStreet
9 hours ago
Tentative buildup in downward momentum could lead to Pound Sterling (GBP) edging lower; the major support at 1.2310 is unlikely to come into view.
goTop
quote