- Borrowed money in BTC has reached an annual high.
- The price continues to struggle around the $60,000 price range.
Bitcoin [BTC] recently broke its psychological barrier and entered the $60,000 price range. However, this milestone has created significant pressure, with some whales making profits and Bitcoin’s estimated leverage ratio reaching a yearly high.
Bitcoin Leverage Reaches All-Year High
According to data from CryptoQuant, Bitcoin’s estimated leverage ratio has risen to 0.216, its highest level in 2024. This metric shows how much leverage (borrowed money) is used when trading Bitcoin.
Source: CryptoQuant
An increase in leverage usually indicates that traders are taking on more risk. Suppose the BTC price moves in the opposite direction of these leveraged positions.
In that case, this could lead to large-scale liquidations as leveraged positions are closed by force. This often results in rapid price drops.
Furthermore, a rising leverage ratio indicates potential price volatility. As more leverage enters the market, price movements, both upward and downward, are amplified.
If BTC continues to rise alongside increasing leverage, it could lead to an overheated market, where any pullback could lead to significant liquidations.
Alternatively, a sudden price drop could lead to liquidations, causing the price of BTC to fall sharply.
Bitcoin faces resistance after price break
After rising more than 4% on September 13, Bitcoin broke through its short-term average and traded around $60,543.
However, it struggled to maintain this momentum, as evidenced by subsequent trends. Bitcoin fell 0.8% to around $60,012 in the subsequent trading session.
Source: TradingView
BTC has increased trading slightly to around $60,095 at the time of writing. The lack of strong follow-through indicates that the asset has faced significant selling pressure, with some investors taking profits following BTC’s rise.
Whales benefit from price increases
Data from CryptoQuant showed that Bitcoin whale addresses took advantage of the recent price surge to realize profits. When BTC broke the $60,000 mark, these whales’ realized profits increased.
Read Bitcoin (BTC) price prediction 2024-25
Whale Addresses reportedly made more than $50 million in profits, taking advantage of the price increase.
This whale activity underlines Bitcoin’s pressure at this price level as large investors lock in profits, potentially leading to short-term price volatility.