Bitcoin Volatility Ahead? Open Interest & Leverage Ratio Reach Highs

• On-chain metrics signal upcoming Bitcoin (BTC) volatility, with futures open interest and estimated leverage ratio reaching the highest levels for over a month.
• Data from Binance indicates that Binance will contribute to price swings, with a short liquidations cluster forming between prices of $16,650 and $16,940.
• Current BTC price is hovering around $16,547 at the time of writing.

Bitcoin (BTC) is showing signs of upcoming volatility, according to new data from Glassnode and Binance. Futures open interest and estimated leverage ratio have both reached the highest levels for over a month, and Binance has revealed a short liquidations cluster between prices of $16,650 and $16,940.

Futures open interest is a metric that reflects the USD value of the total amount of funds allocated in open futures contracts. The chart shows that it exceeded over 500,000 BTC on December 30th, marking its highest level for over a month. The futures estimated leverage ratio is a metric that represents the ratio between the open interest in futures contracts and the balance of the corresponding exchange. After hitting a low of 0.3 on December 5th, it quickly started to recover and nearly increased by around 10% in 20 days to see 0.34 on December 30th.

Binance also indicated that it will contribute to price swings in the near future. A short liquidations cluster has formed in Binance between the prices of $16,650 and $16,940. The current BTC price is hovering around $16,547 at the time of writing, only $100 away from entering the mentioned cluster.

All in all, these metrics suggest that Bitcoin volatility is on the horizon. The futures open interest and estimated leverage ratio are at their highest levels for over a month, and Binance has revealed a short liquidations cluster near the current BTC price. This could be a sign of an upcoming BTC price swing, and traders should be prepared for increased volatility over the coming days.