Crypto Leverage Surged $2.4B Amid December Fear

• Crypto leverage rose by $2.4B in December despite market fear.
• Whales withdrew 20,000 BTC while activity dropped 40%.
• Retail traders increased risk as pros exited the market.

In December, the crypto market experienced a sharp shift in behavior. While overall activity plunged by 40%, retail traders went in the opposite direction—ramping up their exposure with a massive $2.4 billion increase in leverage. This move happened as larger, professional investors—often called “whales”—were pulling out of the market.

This divergence signals a classic pattern in crypto cycles: retail traders buying the dip while institutional players become more cautious.

Whales Withdrew, Professionals Backed Off

Blockchain data shows that over 20,000 Bitcoin were withdrawn from exchanges by whales during the month. This signals reduced confidence or preparation to hold assets off-platform, possibly due to market instability.

At the same time, professional money quietly stepped away. These are the traders and institutions typically guided by data and long-term strategies. Their exit paints a cautious outlook, in stark contrast to retail traders who were increasing their leveraged positions.

Leverage Soars as Fear Dominates

The $2.4 billion rise in leverage reflects a surge in risk appetite, particularly from smaller investors hoping for a quick recovery or rebound. However, this increase in open interest also raises volatility risk. When the market is driven by fear and high leverage, even small price moves can trigger large liquidations.

This dynamic could set the stage for sharp price swings in early 2026, depending on how the broader macroeconomic and crypto-specific factors play out.

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• Crypto Leverage Surged $2.4B Amid December Fear