Despite several episodes of extreme liquidations over the past few months, a segment of investors continues to gain market exposure through leverage.
This persistent risk-taking is reflected in the evolution of open interest, particularly on Binance, where it has increased by roughly 10,000 BTC, approximately $900 000M, since December.
However, a slight slowdown in this trend has been observed since January, suggesting that risk appetite remains relatively muted.
This development is taking place in a market environment characterized by prolonged uncertainty, which is not particularly conducive to aggressive risk-taking.
Markets are facing a macroeconomic backdrop that is increasingly difficult to interpret, driven by the combined effects of geopolitical, economic, and trade tensions. This lack of visibility heightens market nervousness and weakens the most exposed positions.
In such an environment, market structure becomes especially fragile. This creates the conditions for spontaneous, and sometimes violent, volatility spikes, such as the one recently observed following the announcement of new tariffs by Donald Trump.
This type of catalyst often acts as a trigger, exposing the latent imbalances that have built up in the derivatives market.
As a result, many late long positions were liquidated in a cascade yesterday, triggering a significant long squeeze on Binance.
These events generate extreme price movements, particularly on an exchange like Binance, which currently concentrates the highest level of open interest in the market.
This concentration of leverage mechanically amplifies price reactions, turning macroeconomic announcements into genuine episodes of market stress.
Written by Darkfost
