Bitcoin (BTC) rebounded from a local low near $114,800, closing last week about 2.1% higher at $119,580 and turning the range floor into tentative support, according to Bitfinex Alpha’s July 28 report. 

The recovery has stabilized spot prices, but derivatives data suggest a more fragile backdrop as leverage rebuilds across major and altcoins.

Leverage runs hot

The brief dip inflicted outsized damage on leveraged longs. Between July 23 and July 24, more than $1.1 billion in long positions were liquidated across major centralized venues.

According to the report, this movement as a reminder that even modest spot pullbacks can trigger aggressive deleveraging when positioning runs hot. Liquidations have stayed elevated, averaging $350 million per day across longs and shorts over the past 30 days.

The three‑day slide of roughly 5% experienced by BTC from July 23 to 25 snowballed into $1.46 billion in long liquidations, including $370 million tied to Bitcoin. 

Altcoins were hit harder on a relative basis, as the ratio of altcoin liquidations to BTC liquidations reached historically high levels, highlighting how crowded and sensitive high-beta exposures have become.

Open interest (OI) composition reinforces the shift in risk. Bitcoin OI dominance has fallen to 41%, down from 51% three months ago. In comparison, Ethereum (ETH) OI has risen from 17% to 26%, reflecting speculation around exchange-traded funds (ETFs), progress in scaling, and growing institutional activity. 

Altcoins collectively hold OI dominance in the low 30% range, but the mix is shifting quickly as capital rotates to new narratives and listings.

In absolute terms, the leverage build is stark. Since early July, combined open interest across leading altcoins, including ETH, Solana, XRP, and Dogecoin, has jumped from $26 billion to $44 billion, signaling a surge in speculative capital and heavier use of futures leverage.

Fragile phase ahead

The combination of spot stabilizing at a range low while leverage expands tends to produce reflexive conditions. 

The report noted that momentum can lead to increased risk-taking. Still, any stall or negative headline can trigger a cascade of liquidations, sharp reversals, and exaggerated volatility, particularly in thinner altcoin books. 

BTC remains structurally sound, yet systemic fragility is rising beneath the surface as risk disperses away from Bitcoin.

The report concluded that the implication is straightforward for traders. The $114,800 area matters for near‑term trend validation, but discipline may matter more. 

Sizing for volatility, watching funding and basis, and respecting that a leverage‑heavy market can move faster than the spot chart implies. If leverage cools, the bounce can build. If it doesn’t, the next shock could test that newfound support.

Mentioned in this article

Robert Kiyosaki, the author of the popular ‘Rich Dad Poor Dad’ book has once again shared his bullish outlook over precious metals like Gold and Silver, as well hope around Bitcoin.

In his recent tweet, Robert Kiyosaki explains that Gold and silver are precious metals believed to be gifts from God. However, gold is much more costly than silver. Silver, which is used in industries and becoming scarcer, seems like a better value to me for long-term investment. The great thing is, anyone can invest in silver, he adds.

Currently, Gold is trading at a price of $1,195 per ounce in the US. On the other hand, the spot Silver price is currently at $22.69 per ounce.

Gold &Silver Gods$ put on earth by God. Problem gold is multple X more expensive than silver. Silver an industrial precious metal growing more rare as used up. To me silver is better bargain as long term investment. Best of all everyone can silver. Get it? Got it? B4Gone?

— Robert Kiyosaki (@theRealKiyosaki) August 14, 2023

While Gold has a higher barrier to entry, the same is not the case with Silver and of course Bitcoin. Kiyosaki has been bullish throughout the year on Gold, Silver, and BBTC citing fragility in the US economy. He also noted that with America’s debt going up, the value of the US Dollar is likely to erode with time and Gold, Silver, and Bitcoin shall play a greater role here.

Last month, Robert Kiyosaki stated that he expects the Bitcoin price to reach $120,000 in the near term. He expects BTC to hit this milestone as soon as the next year in 2024. As we know, the Bitcoin blockchain will be undergoing halving in mid-2024 and thus many analysts are already bullish about the price rally.

Analysts Views on Gold and Bitcoin

Top leaders from global financial companies have shared their opinions on Bitcoin. BlackRock CEO Larry Fink recently showered praise on Bitcoin after applying for spot Bitcoin ETF in June this year.

Ray Dalio, the founder of Bridgewater Associates, the world’s largest hedge fund, has shared his perspective on the ongoing debate between Bitcoin and gold. Notably bullish on gold, Dalio expressed his preference for gold over Bitcoin.

Despite holding a small amount of BTC, he believes that Bitcoin’s role as digital gold is unproven due to its volatility, which raises concerns about its suitability as a store of value or currency. In contrast, Dalio values gold’s stability, historical reliability, scarcity, and inherent value, making it a trusted asset for wealth preservation over thousands of years.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.