On Binance, Bitcoin leverage remains high: what the derivatives data hides
By the end of July, the Bitcoin derivatives market presents an intriguing picture: despite a harsh liquidation of long positions, leverage in the system remains elevated. Analysis of Binance data confirms that traders are not rushing to exit the market, but rather regrouping.
Open Interest Rises, Leverage Doesn't Fall
Over the past month, open interest (OI) in Bitcoin futures has grown by approximately 9% — from $7.1 billion at the end of June to $7.78 billion. Meanwhile, Bitcoin itself has risen from levels below $60,000 to around $63,400. It would seem that price growth should be accompanied by a reduction in risk, but the data suggests otherwise.
The funding rate for perpetual contracts has remained positive throughout the period, meaning a constant premium paid by holders of long positions. At the beginning of July, it peaked at around 0.01%, but by July 28, it had dropped to 0.0011%. Such a decline is an important signal: holding long positions has become almost free, but this indicates not a consolidation of bulls, but rather market indecision.
Liquidations: Cleaning Out Weak Hands
The tension was most evident in a wave of liquidations. When Bitcoin corrected from levels above $65,000, approximately $40 million in long positions were forcibly closed on Binance. However, short sellers were hardly affected. Interestingly, earlier in July, the market sharply "hit" those betting against growth several times, but by the end of the month, this dynamic had faded.
Most tellingly: the total volume of open trades remained almost unchanged. Traders did not leave, but either increased or maintained their investments. This suggests that liquidations only affected the most vulnerable buyers, while "large players" stayed in the game.
Two Scenarios for the Market
Analysts assess further movement based on two scenarios. The first is alarming: the funding rate will rise again to 0.01%, and OI will hold above $7.7 billion. Such a combination would indicate market overheating and increase the risk of a new crash. When traders massively bet on growth with expensive leverage, it is a classic precursor to sharp sell-offs.
The second scenario looks healthier: price rises while open interest declines. This would mean a market reset, where excessive leverage gradually exits rather than collapsing all at once.
Expert opinion: For now, the market fluctuates between these options. Leverage in the system persists, but holding trades has become almost free. The decisive factors will be the funding rate and the Fed's decision on July 28–29. If OI continues to grow without a price correction — get ready for volatility.