Why High Leverage and Low Liquidity Could Be a Dangerous Mix

Actionable Market Insights

Author

10x Research
September 21, 2025

Why this report matters

Crypto markets are showing cracks beneath the surface. Open interest remains near record highs, yet trading volumes have thinned dramatically—leaving leverage elevated but conviction scarce. In Bitcoin, option flows reveal traders selling upside calls, a sign of muted bullish conviction even as implied volatility drifts lower. Ethereum tells a different story, with option demand leaning bullish, but futures activity failing to back it up. Across altcoins, positioning extremes point to fragile setups where even small shifts in sentiment could spark outsized moves.

Crypto Market Cap (LHS, $ trillions) vs. Trading Volumes (RHS, $ billions)

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