CryptoQuant founder Ki Young Ju says bitcoin's OG traders are coming off their most profitable cycle ever, with ETF inflows and digital asset reserve companies now serving as the main structural buyers rather than exchange traders. Binance traders' unrealized profits have been pushed to nearly three times the level seen at the 2021 cycle top. Ju writes that the market is deleveraging while bitcoin's price remains near levels from two years ago; much of the unrealized profit accumulated in this cycle has flowed into futures leverage. As traders take profit, BTC has stabilized near the average cost basis of Binance traders. On-chain market leverage, defined as BTC/USDT futures open interest divided by USDT reserves, previously exceeded 0.5 and has now eased to roughly 0.3, still higher than before ETFs launched. If ETF inflows keep coming, futures leverage is likely to climb again. Ju also points to 2023 OG whale buying when BTC traded near $16,000, with the buyer/seller ratio indicating that a large number of market buy long positions were built around the cycle bottom.
BlockBeats News (Aug. 13) — CryptoQuant founder Ki Young Ju said bitcoin's OG traders have just come out of the most profitable cycle in history. Unlike earlier cycles, exchange traders are not the main exit liquidity this time. ETFs and DAT (digital asset reserve companies) have become the primary buyers, and that structural bid has lifted the unrealized profits of Binance traders to nearly three times what they were near the 2021 cycle top.
Ju pointed out that the current price range is similar to two years ago, which puts the market in a deleveraging phase. Large unrealized profits accumulated during this cycle have moved into futures leverage. As traders take profits, BTC is now trading steadily near the average cost basis of Binance traders.
Leverage still above pre-ETF levels
On-chain market leverage, measured as BTC/USDT futures open interest divided by USDT reserves, briefly exceeded 0.5 and now sits around 0.3, still higher than before ETFs launched, he said. If ETF inflows continue, futures leverage is expected to rise again.
Ju also recalled that OG whales bought heavily in 2023 while BTC traded close to $16,000. The buyer/seller ratio showed a large number of market buy long positions were established near the cycle bottom.
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