Excess leverage has virtually disappeared from cryptocurrency markets, potentially setting the stage for a healthier, spot-driven recovery, according to analysts. Global geopolitical tensions have reduced risk appetite, causing Bitcoin’s leverage ratio on Binance to fall sharply from 0.198 in February to 0.152 as the asset’s price declined. Market observers note this reduction in systemic pressure could stabilize prices before a new directional phase.
Analysts report that excess leverage in crypto markets has virtually disappeared, which could result in a healthier spot-based market recovery. Global tensions, particularly the Iran-US conflict, have rattled markets and pushed investors away from risk-taking.
“Periods like this are generally not favorable for risk-taking, and this can be clearly observed in the sharp decline of Bitcoin’s Estimated Leverage Ratio on Binance,” said CryptoQuant analyst Darkfost. The metric compares futures Open Interest to BTC reserves on an exchange and has fallen sharply since February, coinciding with Bitcoin’s drop from $96,000 to $69,000.
If the ratio stays low during Bitcoin’s consolidation, it likely signals spot buying is becoming the dominant price driver. “Lower leverage generally means less systemic pressure, which can help stabilize price action before the market enters a new directional phase,” the analysis stated.
In a separate post, CryptoQuant analyst “IT tech” said that “bottom callers are multiplying,” pointing to a key metric in distress territory for 29 days. “Recent buyers are underwater… Calling a structural low here is premature,” the analyst added.
Glassnode reported that momentum has “firmed modestly” but price action still lacks decisive bullish strength. “Spot activity remains subdued, with lower trading volume pointing to softer participation even as conditions begin to stabilize,” the report noted.
Spot markets climbed 4.3% to reach $2.46 trillion following U.S. President Trump’s comments that the war with Iran could be “over soon.” Bitcoin reclaimed $70,000 in early Asian trading on Tuesday as oil prices fell 28% from a high of $120.
Ether remained weak but was holding above $2,000, while some altcoins saw larger gains. Coins including Hyperliquid and Zcash surged more than 11% each.
