Bitcoin Near $80,000 As Leveraged Bets Remain High

Leverage traders continue to bet on a bitcoin rebound despite weak spot purchases. This divergence could amplify a new drop below 80000 dollars, as many long positions would then be exposed to forced liquidations.

Traders remain optimistic despite spot sell-offs

The perpetual futures market shows that bullish bets remain significant. According to Glassnode’s weekly report published on October 19, payments made by long positions increased by 49.4%, from $1.1 million to $1.6 million.

These fees, called funding rates, help keep perpetual contract prices close to the real bitcoin price. When buyers pay sellers, it generally signals stronger demand for positions betting on an increase.

However, several data show that this optimism rests on a fragile structure :

• Buyer payments reached $1.6 million ;
• Open interest on futures remains high at $36.4 billion ;
• Spot sell-offs still exceed purchases ;
• Open interest on options has grown to $38.6 billion ;
• The cost of protection against a drop has sharply increased ;
• The $80,000 threshold remains the main support to defend.

Open interest on futures only fell by 0.3%, compared to $36.5 billion a week earlier. Leverage positions remain numerous despite bitcoin’s recent decline.

This situation does not automatically cause a new drop. However, it increases market sensitivity. If price falls sharply enough, platforms can close long positions whose margin becomes insufficient. These automatic sales may then accelerate the initial movement.

Options reveal increased demand for protection

The options market shows more marked caution. The 25 delta imbalance indicator, which compares the price of bearish protections to that of equivalent bullish bets, rose from 5.2% to 8.6% in one week.

This increase shows investors agree to pay more to protect themselves against a drop. Put options thus become more sought after, even though bitcoin’s daily movements remain relatively moderate.

The gap between anticipated volatility and actually observed volatility also went from -3.8% to +2.1%. The options market now expects stronger future fluctuations than those recently recorded.

This caution is explained by the persistent weakness of spot demand. The Glassnode indicator that measures the gap between aggressive purchases and sales worsened by 24.7%. Its balance dropped from -$67 million to -$83.6 million.

Daily volume has changed little, with a rise from $5.4 billion to $5.5 billion. Activity thus remains stable, but sellers increasingly dominate trading. This development does not confirm a sustainable accumulation capable of supporting leveraged long positions.

Glassnode describes a more defensive market, but not yet subject to extreme fear. The cost of protections rises, without reaching levels usually associated with panic periods.

The 80,000 dollar threshold becomes the main test

Bitcoin trades near $82,596. The $80,000 threshold has already attracted buyers since the October decline, but a new break could quickly change the balance.

Recent holders reinforce this vulnerability. The share of supply controlled by short-term investors rose from 14.5% to 14.7%, above its usual historical range. These actors often react faster to price changes.

The proportion of bitcoins held with unrealized gains also dropped from 70.1% to 68.2%. At the same time, the ratio between realized profits and losses fell from 0.8 to 0.4. Losses thus become more significant compared to gains realized.

A fall below $80,000 could push traders to voluntarily reduce their positions, then trigger forced liquidations if the movement accelerates. Conversely, a rebound supported by genuine spot purchases would reduce this risk.

The Federal Reserve meeting on October 27 and 28 constitutes the next catalyst. A stricter monetary policy could weigh on risky assets. The danger thus does not come only from a bitcoin drop but from the leverage accumulated by traders still waiting for its recovery.

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.