Gold at its limit: record leverage in the US signals risks for bitcoin
Financial markets are sending alarming signals that directly affect the cryptocurrency sector as well. An analysis of the current environment points to overheating in gold and an extreme level of leverage on U.S. exchanges. Together, these factors create a fragile and potentially dangerous environment for all risk assets, including Bitcoin (BTC).
Gold Loses Its "Safe Haven" Status
My analysis shows that gold, traditionally considered a safe-haven asset, has recently been behaving like a highly speculative instrument. For the first time since 2007, its 180-day volatility is trading at a premium of approximately 2.3 times the volatility of the S&P 500 index. This is a historically anomalous shift. The February peak near $5,500 per ounce was likely the point of maximum optimism, followed by a correction of roughly 30%. The precious metal is now at the round support level of $4,000, and while a bounce from here would be technically logical, the overall sentiment remains overheated. The rise in the yield on 30-year U.S. Treasury bonds to 5.2% (a high since 2007) adds additional pressure on non-yielding assets like gold, making its position vulnerable compared to equities.
Record Leverage: A Ticking Time Bomb
An even more alarming signal comes from the U.S. ETF market. The total volume of leveraged positions managed by American funds has reached a record $208 billion. However, considering double and triple leverage, the real volume of speculative positions exceeds $460 billion. Since the beginning of April, this figure has grown by roughly $200 billion. The lion's share consists of triple-leveraged funds ($320 billion), followed by double-leveraged funds ($171 billion). Meanwhile, inverse ETFs, which profit from declines, account for only $27 billion. Such a one-sided market structure, where virtually all bets are placed on growth, has never been so extreme before. The market is extremely overloaded and primed for a sharp reversal.
A Double Blow for Bitcoin
For Bitcoin, the situation is twofold. On one hand, as a risk asset, it would immediately fall under a wave of forced selling if a stock market crash triggered by the unwinding of these leveraged positions begins. On the other hand, if faith in gold as a safe-haven asset is finally shaken, some capital may start seeking a new "safe haven." In this scenario, Bitcoin, with its growing institutional recognition and limited supply, has every chance of capturing this demand.
My expert opinion: The market is in a zone of maximum risk. The current situation resembles a taut string. Any external shock—from geopolitics to inflation data—could become a trigger for a chain reaction. For Bitcoin, this means a high probability of sharp movements in the coming weeks, and the direction of this movement will depend on which scenario plays out: a flight from risk or a flight into a new digital asset.