Bitcoin spot buying outpacing futures despite leverage hitting ATH

Bitcoin (BTC) perpetual contracts denominated in Tether USD (USDT) show signs of overleveraging, with “open interest to USDT reserve ratio” reaching an all-time high at 0.593 on Nov. 10, according to CryptoQuant data.

The firm’s CEO, Ki Young Ju, said the current levels are 2.7x higher than in February when the ratio crossed the dangerous zone for the first time in 2024. 

Additionally, he said it is unclear how high Bitcoin will go, but there will be a painful pullback once the leverage unwinds. However, he added that he remains bullish on BTC in the long term.

Bitcoin registered a new all-time high of $93,523.65 in the few hours following CryptoQuant’s CEO post. The movement was quickly followed by a 5% correction, with BTC’s price currently trading around $88,701.71.

The results of the potential unwinding were not manifested in the correction, as the liquidations volume is still 5% down in the past 24 hours, totaling nearly $872 million, according to Coinglass.

Healthy metrics

Other on-chain metrics remain healthy despite the risk of unwinding leverage pressuring BTC’s price down. CryptoQuant analyst Martuun pointed out that retail investor demand reached a 52-month high in the past 30 days. He added:

“It’s impossible to ignore that retail trading is fully back, with Dogecoin surging, high funding rates, and a spike in Google searches for Bitcoin.”

Furthermore, according to a Glassnode report, the recent Bitcoin price spikes are predominantly driven by spot buyers on Coinbase’s market. 

The daily Cumulative Volume Delta (CVD) for Bitcoin’s spot market on Coinbase reached $143 million, nearing the $152 million peak seen in March. 

This movement in the US market reflects a steady rise in buyer-side pressure, reinforcing the robust demand from investors who view Bitcoin as an increasingly valuable asset.

Since July, each Bitcoin rally has seen strong buy-side interest on Coinbase, signaling solid spot market demand. 

This demand trend also extends to spot ETFs, with US assets under management in Bitcoin spot ETFs surging by $8.8 billion over the past 30 days, surpassing the $6.9 billion increase in CME futures open interest. 

The preference for spot-driven ETFs reflects a broader shift in investor sentiment toward direct exposure over futures-based speculation.

While perpetual futures also saw a recent premium peak of $1.59 million per hour on Nov. 12, it remains below March levels, indicating that spot buying, not leverage, is the primary driver of Bitcoin’s current rally.

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