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Bitcoin keeps breaking records, but it is now the market’s backstage that is drawing attention. While its price approaches all-time highs, another figure is alarming the counters: 96 billion dollars of open interest on derivatives. This data, as fascinating as it is worrying, raises a simple but crucial question: is leverage propelling bitcoin… or preparing its fall?
In Brief
Open interest on Bitcoin derivatives reaches 96 billion dollars, sign of intense speculation.
Leverage fuels bullish rallies but significantly increases liquidation risks.
Large players seem to accumulate silently amid a tense and unpredictable market.
A colossal open interest fueling the market flames
Bitcoin flirts once again with its historical highs, and this time, the fuel does not come solely from spot demand or freshly launched ETFs. No, the real driver is elsewhere: in the 96 billion dollars of open interest on derivatives linked to bitcoin.
This staggering figure reflects investors’ growing appetite for leveraged contracts. On the surface, it seems like an unrelenting bullish signal. But beneath lies a far more worrisome complexity.
Since the explosion of spot ETFs in January 2024, leveraged positions have taken on an almost structural dimension in the bitcoin market. The realized leverage capitalization today reaches 10.2%, a level among the most extreme since 2018.
This phenomenon is no coincidence: as BTC price moves within the range of 100,000 to 110,000 dollars, every market move is amplified by increasing leverage, creating an environment as explosive as it is fascinating.
Those who remember the 2021 crash know the refrain: euphoria, exaggeration, liquidation. History could well repeat itself. Cascading liquidations remain a tangible risk. A single spark is enough for the house of cards to collapse.
Leverage: catalyst or troublemaker?
Leverage in crypto markets acts as a double-edged sword. On one side, it boosts returns and accelerates bullish breakouts. In May 2025, Binance recorded a monthly record of 1.7 trillion dollars in futures volume. A speculative frenzy rarely seen before. But this extreme level of commitment comes with an equally exceptional fragility.
When margins become too tight, the sideways movements of bitcoin, like those observed for more than a month above 100,000 dollars, turn into powder kegs.
Short and long positions neutralize each other, but a single sudden deviation in either direction is enough to trigger an avalanche of liquidations. This could propel bitcoin beyond 111,800 dollars… or send it into free fall, dragging down overly exposed traders.
However, a structural change slightly eases this tension: the dominance of stablecoins as margin collateral. Since the collapse of FTX, traders prefer collateral in stable assets over volatile cryptocurrencies. This evolution helps smooth brutal volatility. But let’s be clear: it mitigates, without eliminating, the systemic risk inherent to massive leverage.
Bitcoin whales wait in calm waters
In this highly tense environment, another phenomenon deserves attention: the behavior of major players. While retail traders scramble within a narrow range, the strong hands observe.
These institutions and funds with an informational advantage seem to be quietly accumulating. The longs/shorts ratio remains balanced, but the increase in short positions in this price zone suggests the market might be ripe for a brutal “short squeeze.”
As always in derivative markets, it is not declared intentions that matter, but actual positions. And these show that bitcoin has entered a phase of extreme tension: a precarious balance between bullish euphoria and threat of rapid disintegration.
Ultimately, the 96 billion dollars of open interest are neither a simple bullish signal nor an isolated bearish warning. They are both. Bitcoin dances on the edge of the precipice, propelled by leverage that, if skillfully used, can open the way to new highs. But if it turns against it, the backlash could be violent, swift, and spectacular.
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Fascinated by Bitcoin since 2017, Evariste has continuously researched the subject. While his initial interest was in trading, he now actively seeks to understand all advances centered on cryptocurrencies. As an editor, he strives to consistently deliver high-quality work that reflects the state of the sector as a whole.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
