Bitcoin (BTC) Price Shows Signs of Overleveraging as 'Open Interest to USDT Reserve Ratio' Reaches All-Time High

Bitcoin (BTC) perpetual contracts denominated in Tether USD (USDT) show signs of overleveraging, with “open interest to USDT reserve ratio” reaching an all-time high at 0.593 on Nov. 10, according to CryptoQuant data.

Bitcoin (BTC) perpetual contracts denominated in Tether USD (USDT) are showing signs of overleveraging, with the “open interest to USDT reserve ratio” reaching an all-time high at 0.593 on Nov. 10, according to CryptoQuant data.

This metric indicates the total amount of outstanding perpetual contracts relative to the USDT reserves held by major exchanges. Higher ratios suggest a greater use of leverage in the market.

Ki Young Ju, the firm’s CEO, highlighted the significance of this development, stating that the current levels are 2.7x higher than in February, the last time the ratio crossed the dangerous zone in 2024.

“It’s unclear how high BTC will go, but there will be a painful pullback once the leverage unwinds. I’m still bullish on BTC in the long term.”

Interestingly, Bitcoin registered a new all-time high of $93,523.65 in the few hours following the CryptoQuant CEO’s post. The movement was quickly followed by a 5% correction, with BTC’s price currently trading around $88,701.71.

However, the results of the potential unwinding were not yet fully manifested in the correction, as the liquidations volume is still 5% down in the past 24 hours, totaling nearly $872 million, according to Coinglass.

Healthy metrics

Other on-chain metrics are showing healthy signs despite the risk of unwinding leverage putting pressure on BTC’s price.

CryptoQuant analyst Martuun highlighted that retail investor demand reached a 52-month high in the past 30 days. He added:

“It’s impossible to ignore that retail trading is fully back, with Dogecoin surging, high funding rates, and a spike in Google searches for Bitcoin.”

Furthermore, a Glassnode report suggests that recent Bitcoin price spikes are largely driven by spot buyers on Coinbase’s market.

The daily Cumulative Volume Delta (CVD) for Bitcoin’s spot market on Coinbase reached $143 million, approaching the $152 million peak observed in March.

This trend indicates a strong buy-side interest in the U.S. market, highlighting sustained demand from investors who view Bitcoin as an increasingly valuable asset.

Since July, each Bitcoin rally has been accompanied by strong buy-side interest on Coinbase, indicating robust demand in the spot market.

This demand is also evident in the performance of spot ETFs, with U.S. assets under management in Bitcoin spot ETFs surging by $8.8 billion over the past 30 days, outpacing the $6.9 billion increase in CME futures open interest.

The preference for spot-driven ETFs reflects a broader shift in investor sentiment toward direct exposure over futures-based speculation.

While perpetual futures also saw a recent premium peak of $1.59 million per hour on Nov. 12, it remains below March levels, indicating that spot buying, not leverage, is the primary driver of Bitcoin’s current rally.

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