Bitcoin Leverage Drops to Pre-ETF Levels: CryptoQuant CEO
CryptoQuant CEO notes BTC-USDT leverage cooling, returning to pre-ETF approval levels.
- BTC-USDT perpetual leverage is cooling off.
- Levels now resemble pre-ETF approval conditions.
- ETF & MSTR inflows no longer prop up long positions.
Leverage in Bitcoin Markets Is Cooling Down
According to Ki Young Ju, the CEO of on-chain analytics firm CryptoQuant, the BTC-USDT perpetual futures market is seeing a decline in leverage. This comes as the market resets after the intense activity surrounding the U.S. spot Bitcoin ETF approvals.
Ki Young Ju highlighted that perpetual leverage ratios—a key measure of how much borrowed money is being used in Bitcoin trades—are now returning to levels seen before the ETF approvals. This signals a significant shift in the market’s risk appetite and may indicate healthier, more organic trading activity.
ETF and MSTR Inflows No Longer Shield Over-Leveraging
In the lead-up to and shortly after the U.S. Bitcoin ETFs were approved, massive inflows into funds like MicroStrategy (MSTR) and spot ETFs helped absorb volatility. These inflows also supported overleveraged long positions, cushioning the market from typical liquidation cycles.
Now, with those inflows slowing, the market is no longer shielded from liquidations. This has allowed the system to flush out excessive long positions, returning the perpetual markets to a more balanced state.
Lower leverage also reduces the chances of sudden wipeouts during price corrections, a trend that could contribute to a more stable and sustainable Bitcoin rally if bullish momentum resumes.
What This Means for Traders and Investors
For traders, this cooling in leverage means less speculative froth and possibly fewer dramatic price swings. For long-term investors, it’s a sign of a maturing market adjusting to post-ETF dynamics.
While the excitement around ETFs and institutional adoption remains, this reset in leverage indicates a potential foundation for more stable growth, rather than short-term hype-driven surges.
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