Bitcoin's leverage ratio is dropping sharply

Analysts say excess leverage in crypto markets has virtually disappeared, which could lead to a healthier market-based recovery.

Global tensions, especially the conflict between Iran and the US, have shaken the crypto markets and led investors away from risk.

“States like this are generally not conducive to risk-taking, and this can be seen in the sharp drop in the estimated leverage ratio of Bitcoin on Binance,” CryptoQuant analyst Darkfost said on Monday.

The metric measures the intensity of leverage and is calculated by comparing the futures Open Interest (OI) with the amount of BTC reserves on the exchange. Since February, the ratio has fallen sharply from 0.198 to 0.152 – coinciding with Bitcoin’s decline from $96,000 to $69,000.

Healthy market dynamics

If the ratio remains low as Bitcoin consolidates, it likely indicates that spot buying rather than compressed speculation is becoming the dominant price driver, which is a healthier dynamic.

“Lower leverage generally means less systemic stress, which can help stabilize price action before entering a new directional phase.”

🗞️Bitcoin Re-Leveraging After Market Volatility

“Since February, the estimated leverage ratio of Bitcoin on Binance has dropped from 0.198 to 0.152, which represents a significant and rapid decline. This type of movement is usually seen after periods of strong and major volatility… pic.twitter.com/q1MVOR5CZa

— Darkfost (@Darkfost_Coc) March 9, 2026

In a separate message, CryptoQuant analyst “IT tech” said that “bottom calls are increasing.” One metric hit the emergency territory for just 29 consecutive days, they added, highlighting the ratio of long-term Bitcoin holder to SOPR holder, which is 0.89.

“Recent buyers are underwater. LTHs aren’t selling, but they aren’t selling either. Building STH capitulation, but nowhere near extreme. Calling a structural low here is premature.”

Meanwhile, Glassnode reported on Monday that momentum has “stabilized modestly” with the RSI declining from recent lows, “but price action still lacks the power to make a decisive change.”

“Spot activity remains subdued and lower trading volume suggests softer participation, even as conditions stabilize.”

Crypto market outlook

Spot markets rose 4.3% on the day to $2.46 trillion after US President Trump said the war with Iran could “end soon”. Bitcoin regained $70,000 in early trading in Asia on Tuesday as oil prices fell 28% from Monday’s $120 level.