Key takeaways:
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Open interest in Bitcoin futures and options has ballooned to $96 billion, up sharply from 2022 levels.
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Elevated speculative leverage fuels BTC’s bullish breakouts, but it also raises the risk of cascading liquidations, reminiscent of 2021 volatility.
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Stablecoin-margined collateral now dominates over crypto-margined positions, helping mitigate volatility shocks amid heightened trading activity.
Bitcoin’s derivatives market, which commands $96.2 billion in open interest (OI), is poised to shape price dynamics each time BTC trades near all-time highs. While Bitcoin (BTC) OI is currently down from a $114 billion peak, it still dwarfs its 2022 levels.
Glassnode pointed out that the introduction of US spot Bitcoin ETFs in January 2024 accelerated this trend. In 2023, open interest fluctuations were relatively tame, but post-ETF, 30-day changes have grown more volatile, reflecting a market increasingly driven by leveraged trades.
The Realized Cap Leverage Ratio, now at 10.2%, ranks among the top 10.8% of trading days since 2018, signaling heightened speculative activity that could continue to drive price action as Bitcoin hovers near all-time highs.
This could amplify Bitcoin’s price potential, driving rapid rallies past key resistance levels at $111,800 and boosting liquidity, as observed in Binance futures data, where most trader participation thrives.
As illustrated, in May 2025, Binance achieved a remarkable milestone, recording $1.7 trillion in futures trading volume, the highest monthly figure in 2025. This surge in activity signals a robust wave of market speculation and engagement, significantly contributing to Bitcoin’s bullish momentum at the beginning of Q2.
Yet, this same leverage carries caution. The risk of cascading liquidations still looms large, potentially triggering sharp price drops, as witnessed in the 2021 crash fueled by volatile crypto-margined positions.
However, Glassnode noted that the market shows signs of maturity. Since the 2022 FTX collapse, stablecoin-margined collateral has overtaken crypto-margined positions, now dominating open interest. This shift reduces collateral volatility, offering a buffer against market shocks.
Related: Bitcoin ‘weak hands’ sell 15K BTC at a loss: Are BTC lows under $100K next?
BTC-USDT futures leverage ratio points to volatility
Data from CryptoQuant indicated that the BTC-USDT futures leverage ratio with respect to open interest is slowly increasing near its peak from early 2025. This confirms the elevated leveraged market concerns outlined above, with Bitcoin moving sideways above $100,000 for over a month.
Likewise, crypto analyst Boris Vest pointed out that traders are preparing to move in either direction. The analyst noted that while short positions continue to increase on Binance, the ratio between long and short is quite balanced, as inferred from the normal funding rates. The trader said,
“Within the $100K–$110K range, most traders are leaning toward short positions. This increases the chances of a move in the opposite direction. It’s possible that larger players are quietly accumulating in this zone.”
Related: Bitcoin should hold $100K as Q3 seasonality predicts sideways trading
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
