Low Leverage Among Bitcoin Bulls Reduces Crash Risk

[mendez]

Bitcoin’s recent price action indicates a healthier market structure, with limited leverage reducing the risk of sharp liquidations.

Data shows that even if BTC falls another 5%, only a small portion of leveraged long positions would be forced to liquidate—less than 1% of total open interest. This suggests the market is not overheated.

Meanwhile, funding rates in perpetual futures markets have turned negative, signaling that bearish traders are increasingly taking leveraged short positions. This dynamic could potentially fuel upward price pressure if shorts are squeezed.

Overall, the lack of excessive leverage points to a more resilient Bitcoin market compared to past cycles.

[bonk]

Negative funding usually makes me think a squeeze could happen