According to the analytics company, recent volatility in the cryptocurrency market suggests that Bitcoin (BTC) risks further damage to its value.
An analysis by research firm K33 shows that increased leveraged position and strong capital flows to Ethereum (ETH) could put major cryptocurrencies under pressure in the short term.
K33 research president Vetle Lunde said in the report that public interest (OI) on Bitcoin futures contracts has reached a two-year high. Data shows that fully open interest in BTC's perpetual contracts is over 310,000 BTC ($34 billion). An increase of 41,600 BTC has been recorded over the past two months, with 13,472 BTC jumps seen at the end of last week.
Lunde said that aggressive long positions in the market are rising from 3% to 11% per year, which is similar to the accumulation of leverage seen in the summer of 2023 and 2024. “The risk of long apertures is very high in the long term. A careful stance will be healthier until excessive leverage is cleared,” Lunde warned.
However, Lunde pointed out that despite Ethereum's record-breaking dollar-dominated prices, the long-term trend towards BTC remains weak. ETH/BTC yields for 1-, 2, and 3 years remain in the negative region.
In past cycles, Ethereum's record highs are often in line with the overall crypto market peak. In 2017 and 2021, combined with the ETH surge and the Altcoin boom and the stagnation of BTC signaled the market peak. However, this time, BTC dominance is 58.6%, a stronger position compared to the level below 40% in previous cycles.
*This is not investment advice.
