The Bitcoin leverage ratio on Binance has significantly decreased, and the spot market is expected to take over the dominance of coin prices

According to analyst Darkfost's monitoring, since February, the estimated leverage ratio for Bitcoin on Binance has significantly decreased from 0.198 to 0.152, with a rapid and substantial decline. This trend typically occurs after strong volatility and major price movements. During this period, the price of Bitcoin dropped from around $96,000 to $69,000. Such fluctuations often create panic among investors, prompting some to actively close their leveraged positions, while others are forced to exit due to liquidation. This has led to a significant reduction in open contracts, reflecting the overall deleveraging process in the derivatives market.

Analysts state that if the estimated leverage ratio for Bitcoin does not rebound during the consolidation period, it may indicate that the spot market is taking over the price trend, thereby helping to stabilize the market. In many cases, these deleveraging phases allow the market to reset on a healthier foundation. Lower leverage typically means reduced systemic pressure, which helps price action stabilize before entering a new directional trend. Note: The estimated leverage ratio for Bitcoin is used to measure the intensity of leverage used by investors, calculated by comparing the open contracts in futures with the BTC reserves held by the exchange.