Bitcoin’s Price Volatility Rises as Leverage Increases

Bitcoin’s recent price rebound is accompanied by increased market leverage, according to BlockBeats and Glassnode data. This surge in leverage heightens the risk of sudden volatility triggered by liquidation events and stop-loss orders. Despite a rise in open interest positions, the average funding rate has decreased to -0.023%, suggesting an overall market preference for short positions. While Bitcoin traders are currently betting on a decline rather than an advance with increased short selling activity. A potential ‘short squeeze’ could occur if bullish momentum continues.