The Bitcoin leverage ratio is showing a sell signal right now, indicating that the market could turn bearish, at least in the short term. Bitcoin Leverage Ratio Says Not A Good Time To Buy Right Now As pointed out by a CryptoQuant post, the estimated leverage ratio indicates that this might not be the best time to buy BTC. The all exchanges estimated Bitcoin leverage ratio is an indicator that’s calculated by taking the ratio of open interest divided by the reserves of all exchanges. Estimated Leverage Ratio = Open Interest ÷ Amount of Reserve For those unfamiliar with futures trading, the “open interest” refers to the total number of contracts held by users at the end of a trading day. The all exchanges reserve is naturally the total amount of Bitcoin held in wallets of all exchanges. The leverage ratio indicator can show how much leverage is used by a trader on average. When the value of the metric goes up, it means traders are becoming increasingly confident in their positions. Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course Similarly, a downtrend in the value of the indicator implies the opposite. With the help of these trends, it becomes possible to know whether traders are taking a high risk or a low risk. Now, here is how the latest chart for the Bitcoin leverage ratio looks like: The BTC leverage ratio slightly moves up | Source: CryptoQuant As the ab...
