Bitcoin leads a $3 trillion crypto market recovery, but surging leverage in perpetual futures warns of potential volatility as traders chase gains.
Bitcoin surged nearly 8% to $87,381, its highest since January, and ETFs saw $999 million inflows, but leverage risks loom.
HYPE, the native token of Hyperliquid, surged to a record high amid the crypto market rally.
Privacy-focused Zcash climbed sharply as altcoins joined the rally.
Digital assets have surged past a $3 trillion market valuation, fueled by an 8% Bitcoin rally and $999 million in daily ETF inflows. However, rising open interest in perpetual futures suggests traders are aggressively leveraging positions, increasing the risk of rapid volatility if the market reverses.
While rising open interest can signal market health, it also indicates high leverage. If spot demand fails to support these positions, a minor price reversal could trigger a cascade of long liquidations, forcing prices lower.