High levels of leverage as an element of medium-term instability.

High-levels-of-leverage-as-an-element-of-medium-term-instability

1) On the BTC Estimated Leverage Ratio (% Change; 21D), you can see that high and extreme leverage marks always result in either a massive sell-off or a ranged decline in the price.

2) Right now, there is such a moment when the level of leverage has come close to the weighted average selling level (red dashed line). Accordingly, being more attentive to your current or future positions is recommended.

3) The nearest liquidations for long positions are approximate $19,000-$17,500. The nearest liquidations for short positions are around $21,000-$22,000.

4) Since I'm applying the Rate of Change (ROC) to the Leverage Ratio metric, it can also be interpreted as follows: 
- a value above 0 (green bar histogram) is the prevalence of long positions open with leverage; 
- a value below 0 (light red histogram) is the prevalence of short positions open with leverage.

P. S. I have colored the on-chain metric for your convenience and better visualization.