Ju said Bitcoin is trading around the same price range as two years ago because the market is now undergoing a deleveraging process.
“This cycle’s massive, unrealized gains flowed straight into futures leverage,” he said, adding that profit-taking has brought Bitcoin back toward the average cost basis of Binance traders.
Bitcoin Leverage Still Elevated
Ju pointed to BTC/USDT futures open interest relative to USDT exchange reserves as a gauge of market leverage. The ratio climbed above 0.5 at its peak before falling toward 0.3 as leverage was flushed from the system.
Despite that decline, leverage remains above pre-ETF levels, a structural change Ju doesn’t expect to be fully reversed.
If spot Bitcoin ETF inflows strengthen again, he expects futures leverage to eventually rise alongside them.
That could create the conditions for larger price swings as institutional spot demand combines with increasingly aggressive derivatives positioning.
Are Bitcoin OGs Going Long Again?
Ju also highlighted potentially bullish activity from experienced Bitcoin traders.
During Bitcoin’s 2023 cycle bottom near $16,000, OG whales took aggressive long positions as reflected by a sharp increase in the taker buy/sell ratio.
Similar spikes in taker buying have recently appeared on OKX and other exchanges which indicates that some veteran traders are positioning bullishly again.
However, he cautioned against treating the metric as confirmation that Bitcoin has already established its cycle bottom.
Instead, the taker buy/sell ratio provides a window into the positioning and sentiment of large, experienced market participants.
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