Market analysts are increasingly attentive to crypto leverage levels as digital assets extended gains on Thursday after a softer U.S. inflation print, buoyed by investor optimism on renewed ETF demand and rising rate-cut odds.
Timothy Misir, head of research at BRN, said macro cues and Wall Street inflows have triggered a broad risk-on rally. In a note shared with The Block, he noted that bitcoin has reclaimed some strength above $120,000, while ether crossed $4,700, with ETF demand acting as a springboard for the move.
Spot ether ETFs in the U.S. recorded $729 million of net inflows on Wednesday — their second-largest daily haul on record — helping drive ETH toward its all-time high, according to The Block’s reporting. BTC funds also saw modest flows compared to ETH vehicles.
Ether options
Post-CPI price action “confirms that policy relief and structural inflows remain the backbone of the rally,” Misir said, but warned that record altcoin leverage plus low implied volatility historically introduce choppy price action.
He cautioned that open interest across top altcoins has now climbed to a record after the price surge and a “significant influx of speculative capital.” Implied volatility remains low, a setup that “often precedes realized volatility expansion” into resistance zones that could spark sharp market swings.
Blockchain analytics firm Glassnode confirmed that open interest across major altcoins hit an all-time high of around $47 billion, marking a leverage buildup that can amplify both rallies and drawdowns. Glassnode also flagged ETH options open interest near year-to-date highs of $16.1 billion alongside spot prices near record levels. The Block’s data dashboard similarly shows elevated ETH options OI, consistent with heavy positioning.
Simultaneously, options tenors are at multi-year lows, with modest skews and “no sign yet of panic hedging,” leaving room for a volatility breakout if resistance fails, according to BRN’s analyst.
Bitcoin outlook
Misir said BTC’s short-term holder cost basis near $120,000 is a key level, following brief losses after Bitcoin slipped to $112,000 last week. However, the BRN’s analysis found that “most investors who recently bought Bitcoin were confident enough to hold onto their assets despite the price drop.”
The analyst opined that consolidation around the STH cost basis should encourage bullish sentiment for another rally above BTC’s $124,128 all-time high. “If price can break above, the next target could be $144,000,” he said.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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