MadsEberhardt_Steno2024-03-12

Leverage, leverage, leverage

Yesterday, traders paid as much as 150% annually to maintain long positions in Bitcoin perpetual futures due to the so-called funding rate. This has now dropped to 70%, which is, however, still remarkably expensive. There is only one explanation for this: the appetite for leverage is through the roof. It is often not a good sign when every single trader agrees that the market is going higher and uses leverage to back their conviction.