Bitcoin’s estimated leverage ratio (ELR) across major derivatives exchanges spiked to 0.2709 on Friday, Apr. 25, its highest reading since Jan. 10, 2023.
ELR divides open interest by the number of coins sitting on those venues, so a climb means traders are running larger positions against each BTC held as margin.
Two years ago, the ratio brushed 0.274 while BTC traded near $17,000; the market squeezed 25 % higher within days, then swung lower as crowded longs were forced out.
Today, the same leverage density sits beneath a $95,000 spot price, multiplying the notional risk five-fold.
The push began on Apr. 20 with ELR at 0.236. By Apr. 22, it hit 0.264, helped by heavy ETF-driven buying, and peaked three sessions later alongside a $9,700 rally and a jump in spot turnover to $3.13 billion—triple the prior week’s daily run rate.
High volume suggests momentum-driven longs, not slow balance-sheet accumulation.
When ELR is low, exchanges can withstand routine swings without mass liquidations. Once it climbs toward the 0.27 zone, a modest move can wipe out thin collateral buffers and force exchanges to close positions, turning a dip into a cascade.
That fragility already hinted itself on Monday, Apr. 28: ELR slipped to 0.253 even though price held, implying profit-taking and selective de-risking by the most exposed accounts.
The last time leverage ran this hot, volatility exploded in both directions. With the Federal Reserve’s meeting days away, any hawkish surprise could puncture the build-up quickly.
Until ELR cools toward its 0.24–0.25 comfort band, every incremental rally carries outsized downside risk: the higher the ratio, the thinner the margin for error.
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