Yigit Taha OZTURK 
Cryptocurrency markets appear to be overheating as the current parabolic rally continues. Some industry leaders have warned that a deleveraging may occur before the next major upward move.
Bitcoin price surpassed $85,000 on November 11, reaching $86,788, and the Crypto Fear & Greed Index showed investor sentiment at 80, or “extreme greed,” on November 12. This marked one of the highest values recorded by the index.
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The last time the index hit 80 was on April 9, just before Bitcoin experienced an 18% correction, with the price dropping from $69,135 to $56,500 by May 1. This data suggests that while investors are in a state of extreme greed, caution is necessary as a correction could follow.
After Bitcoin reached a high of nearly $90,000 on November 12, it continued its best weekly performance since the 2023 banking crisis. Over the past seven days, Bitcoin added $413 billion to its market capitalization.
Leverage Cleanup Needed Before Bitcoin Hits $100,000
Current leverage ratios, or the amount of borrowed funds used for trading positions, are reaching unsustainable levels. Kris Marszalek, co-founder and CEO of Crypto.com, warned on November 12:
“Leverage needs to be cleaned up before the attack on $100K. Please manage your risk carefully.”
According to CryptoQuant data, Bitcoin’s estimated leverage ratio across all cryptocurrency exchanges stands at 0.217, which is the highest level seen since October 2023.
Investors Should Prepare for Volatility Ahead of More Bitcoin Gains
While investors are advised to be cautious, Donald Trump’s presidential victory is expected to contribute to Bitcoin‘s continued price appreciation. Shunyet Jan, head of derivatives at Bybit, told Cointelegraph:
“Elevated funding rates and a bullish options skew suggest that both retail and institutional investors are eagerly positioning to capture further upside, with many leveraging their positions. The high funding rates, in particular, underscore the level of leveraged bets, reflecting strong demand for long exposure as confidence continues to build.”
Some analysts expect Bitcoin to surpass the $100,000 mark before the end of the year, driven by anticipated improvements in macroeconomic conditions due to Trump’s presidential victory.
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