YAS0
Estimated Leverage Ratio is still really high
It's an important time to manage risk. The Estimated Leverage Ratio during the bear market was often lower than 1.0. When the markets started rallying towards the 2nd half of 2020 and onto the end of 2021, the Est. Leverage Ratio was moving around 1.2 - 2.0. I marked the bottom dotted line marked at 1.5 since that's the range I personally would like the market to fall back into. Recently, we seen leverage ratio hitting 3.0 and higher. A ratio of 3.0 is considered really high. We've seen a flush out during the LUNA & UST crash, but this was followed by more leverage being taken. And this was then followed up again with another flush out during the Celsius, Blockfi, 3AC insolvent news. However, we are seeing leverage ratio moving up again. I personally believe that institutions and retail are taking leverage positions to cover losses. The question is... what will the market look like if we get a flush out all the way down to somewhere between 1.5 and 2.0? or even lower?