Leverage Accumulation describes the process where market participants increase their exposure to an asset by borrowing funds. This practice amplifies both potential gains and losses, making the market more susceptible to rapid price movements. It is a critical indicator of speculative sentiment and potential systemic risk.
Context
Discussions about Leverage Accumulation are prevalent during periods of heightened market volatility or when analyzing the potential for cascading liquidations. News often reports on the buildup of leverage in specific derivatives markets or across different digital assets. Monitoring this metric provides foresight into potential market instability and the forces driving significant price swings.
Despite high Bitcoin prices, on-chain activity shows fewer transactions but larger transfers, signaling a shift towards institutional dominance and off-chain trading.
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