Leverage in the derivatives market has always been recognized as a key factor that, while helping traders achieve ideal profitability, also introduces significant potential risks. Many traders do not take this risk seriously when faced with market volatility.

In this optimized version of the Estimated Leverage Ratio (ELR) metric, not only is Bitcoin reserve considered, but the reserves of some of the top stablecoins are also factored into the calculations. This is based on the concept that stablecoins have been increasingly used as collateral for derivative trading in recent years.

As a result, when looking at this metric, which has seen a sharp spike, it becomes clear that the Bitcoin derivatives market is now in a risk zone. This means the market is prone to any impulsive movements, whether bullish or bearish.

Therefore, for short-term trades, it is crucial at this time to reduce risk and avoid any emotional decisions.

Written by Crazzyblockk