Bitcoin’s market leverage has surged to a yearly peak, indicating a strong risk appetite and heightened ‘greed’ among traders. Yet, with an impressive $1.2 trillion in unrealized profits, the question remains: can the bulls maintain their momentum?
Currently, Bitcoin (BTC) is trailing just 4% below its all-time high of $112,000, and speculative trading activity has surged to new yearly highs.
Recent data from CryptoQuant revealed that BTC’s Estimated Leverage Ratio across all exchanges has climbed to 0.27—the highest it has been in the past year. This spike indicates a bullish sentiment among traders, but it also raises concerns about potential liquidation cascades. High levels of leverage can lead to rapid price swings that may quickly wipe out positions, creating a precarious situation for investors.
However, experts assert that the market is not yet overheated. Funding Rate data suggests conditions are stable, as CoinGlass reports BTC’s Funding Rate lingering around 2% APR, significantly below the overheated 50%+ levels experienced in late 2024. As a result, current leverage levels appear sustainable for Bitcoin’s upward movement, provided other market conditions remain favorable.
In the event of a liquidation squeeze, traders should closely monitor key support levels around $103,000 and $111,000—both significant liquidity pools that could influence market behavior. Approximately $8 billion worth of leveraged positions at the $103,000 mark could face risk if a brief correction occurs.
Additionally, the considerable level of unrealized profits at the current BTC price presents another layer of potential sell-side pressure. According to Glassnode, unrealized profits are reminiscent of Q4 2024 levels, posing a risk if holders opt to secure their gains. “The total unrealized profit stands at an estimated $1.2 trillion, underscoring the substantial value appreciation experienced by Bitcoin investors, but also the incentive for potential sell-side pressure that may emerge if sentiment shifts.”
Other short-term challenges include the looming Trump tariff deadline on July 9 and the recently passed reconciliation bill, which raised the U.S. debt limit to $5 trillion. Analysts at Coinbase suggest that the U.S. Treasury may need to borrow money as a result, which could deplete U.S. dollar liquidity and adversely affect risk-on assets, including Bitcoin. With the current market reflecting high ‘greed levels,’ any souring of sentiment might lead to an increased likelihood of profit-taking, as expressed by Glassnode.
