A new on-chain model from CryptoQuant quantifies Bitcoin leverage pressure, while futures open interest soars to 773,000 BTC – one of the highest levels in history – painting a cautionary picture for the market.
Bitcoin Leverage Pressure model tracks market stress
CryptoQuant founder João Wedson introduced the Bitcoin Leverage Pressure framework, which combines derivatives data from 29 exchanges with on-chain metrics to assess leverage relative to underlying capital support. Unlike traditional open interest, the model evaluates whether leverage is sustainable, identifying periods of excessive speculation that increase market vulnerability.
The framework uses color-coded zones: green/blue signals low leverage after liquidations, yellow indicates balanced conditions, while orange to dark red zones flag elevated pressure and rising fragility. Wedson noted in his X post that markets gravitate toward liquidity, and crowded positioning often concentrates liquidation levels that can attract price action.
Record open interest amid falling prices
As the Bitcoin Leverage Pressure model registered high risk, open interest across futures markets climbed to roughly 773,000 BTC, near all-time peaks. Bitcoin itself traded around $69,300, below the psychological $70,000 mark, creating a dangerous mismatch where leverage expands while price weakens.
Perpetual funding rates surged to an annualized 10%, meaning longs are paying heavily to hold positions despite the downtrend. This setup risks a cascade of liquidations if prices fail to rebound, turning bullish bets into additional selling pressure.
Spot demand remains weak
Contradicting the leveraged optimism, spot market signals are bearish. The Coinbase Premium Index hovers near -100, showing tepid U.S. institutional demand relative to offshore markets. The Crypto Fear & Greed Index reflects fear, and spot Bitcoin ETF outflows reinforce the lack of buying appetite.
This disconnect is notable because broader risk assets like AI and software stocks are hitting highs, making crypto’s weakness market-specific rather than macro-driven. The combination of elevated leverage and fading spot demand suggests a fresh flush is possible unless buying pressure returns.
