As Nasdaq correlation rises, Bitcoin leverage reaches the 99th percentile - www.tmgm.com
Bitcoin leverage in perpetual futures reached the 99th percentile as open interest hit 353,000 BTC, while its correlation with the Nasdaq climbed to 0.75.
Leverage exposure in Bitcoin perpetual futures rose as open interest touched 353,000 BTC, a reading in the 99th percentile over two years. Forced liquidations and buying by short sellers could magnify Bitcoin's price swings amid high open interest, K33 cautioned.
Bitcoin's link with the Nasdaq strengthened, with its 30-day correlation reaching 0.75, in the 99th percentile of readings since 2020. As Bitcoin extends its decline, leverage in the leading cryptocurrency is nearing a level seldom observed over the past two years.
Extreme Leverage Signals
At 353,000 BTC, notional open interest in Bitcoin perpetual futures stood in the 99th percentile of observations from the past two years, according to K33's head of research Vetle Lunde. Over the past 30 days, open interest has increased by 12% even as Bitcoin has lost 10%.
The leverage buildout likely reflects a combination of hedging activity and speculative positioning. Funding rates have trended higher on both Binance and Bybit, suggesting growing demand for long exposure as BTC tests key support levels.
Readings this high were seen on just 1.2% of trading days during the past two years. K33 warned against interpreting current positioning as a sign of an overwhelmingly bullish market.
Market Turning Points
Several significant market turning points over the past 18 months occurred when open interest exceeded 350,000 BTC, including Bitcoin's October 2025 peak, the November sell-off and the bottoming process in late June 2025.
The historical pattern is noteworthy. Elevated open interest tends to coincide with extended price moves, often preceding reversals or periods of substantial volatility.
Further losses could compel traders to sell their long positions and intensify pressure on Bitcoin. A rebound could prompt short sellers to buy back their positions, supporting further price gains.
Nasdaq Correlation Impact
A closer relationship between Bitcoin and US technology stocks accompanies the build-up in derivatives. Last Thursday, Bitcoin's 30-day correlation with the Nasdaq hit 0.75, putting it in the 99th percentile of observations since 2020.
Last week's equity sell-off brought that relationship into sharper focus. On Thursday, Bitcoin dropped 5.5% as Nasdaq futures lost 7.1%, their largest single-day fall since March 2020.
Such elevated correlations tend to emerge during periods of pronounced risk aversion, when investors broadly reduce exposure to risky assets.
Bitcoin gained in eight of nine instances in which a strong Nasdaq rebound was sustained, delivering a median return of 2.9%. When that recovery faltered, Bitcoin fell in all seven cases, recording a median loss of 21%.
The near-term outlook for BTC thus appears heavily dependent on whether Nasdaq's rebound can be sustained.
At the time of writing, BTC trades at $73,871 after losing 1.4% over the past 24 hours.
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