Bitcoin once again surpassed its previous all-time high, with a new peak above $111,000 amid the continued bullish momentum of the cryptocurrency market. As of writing, Bitcoin was trading at $111,226, reflecting 2.2% of the past 24 hours.
This upward movement brings assets beyond the $110,000 psychological threshold, enhancing optimism in the mid-term trajectory. However, analysts are monitoring potential market data that could mark the risk below the rally surface.
The inflow and utilization ratio of Bitcoin exchange reflects caution
CryptoQuant contributor AMR TAHA recently released a detailed analysis highlighting key metrics of Binance, including net flow, open interest and leverage levels. When these metrics come together, they reveal a familiar setting that reminiscent of December 2024, a period before the short-term correction.
Although Bitcoin’s price action has remained positive, the presence of high exchange inflows and speculative positioning may indicate that some investors are preparing to make a profit. According to Taha, Binance observed a significant increase in inflows, with approximately 3,000 BTC and 60,000 ETH entering the exchange with Bitcoin’s all-time highs.
This shift from net outflows to inflows suggests that investors may be transferring assets to trading platforms with the intention of selling or adjusting their positions. Historically, a large net inflow during peak prices has been associated with increased sales activity, especially when market participants aim to gain after amplifying the uptrend.
Taha also pointed out that the last public interest rate (OI) in December 2024 has risen to more than $12 billion. Public interest refers to the total value of outstanding futures contracts and is usually regarded as an indicator of market speculation.
While rising OI can support an upward continuation during bullish periods, it may also increase the risk of volatility if not supported by new spot market demand. Intensified by this, Binance’s estimated leverage ratio has recovered to 0.20, reflecting previous highs and suggesting that many traders are taking advantage of a lot of leverage. The elevated leverage level tends to increase sensitivity to price fluctuations and can amplify the liquidation during sudden corrections.
Are market conditions responding to December’s setting?
Taha concluded that his analysis shows that while none of these indicators are inherently bearish, their concurrent appearance at new all-time highs may indicate short-term instability. In previous cycles, this combination of high leverage, OI and exchange inflows was associated with increased profits and local callbacks.
Taha wrote:
These are not inherent bearish signals of isolation. However, when used in combination, they are historically related to profitability behavior and are often before volatility peaks or corrections. Traders and investors should be wary: These same conditions mark the beginning of the local top at the end of 2024, especially after a period of aggressiveness.
Feature images created with DALL-E, TradingView’s chart
