Bitcoin News Today: Binance Leverage Plummets as Crypto Market Faces Potential Shakeout

Binance data indicates a notable decline in trading leverage, sparking speculation about a potential market shakeout. According to a recent analysis by CryptoQuant contributor Arab Chain, leverage levels on the exchange have dropped significantly over recent days. A falling leverage ratio is often seen as a short-term positive sign, suggesting that overleveraged traders are exiting positions, reducing the risk of forced liquidations and abrupt price swings [1]. However, Arab Chain notes that in the current context, both leverage ratios and price levels are declining simultaneously, signaling that spot market demand has not picked up to counterbalance selling pressure [1]. This divergence highlights a more cautious and risk-averse sentiment among traders.

The estimated leverage ratio on Binance is viewed as a key short-term sentiment indicator. High leverage implies a market dominated by speculative trading, which can amplify volatility. A reduction in leverage, on the other hand, may reflect either disciplined risk management or widespread liquidations, both of which can temporarily stabilize price movements [1]. Arab Chain describes the leverage metric as an “early radar” for potential shifts in market momentum, emphasizing its relevance for tracking near-term trader behavior.

In parallel, Binance has seen a surge in altcoin deposits, with the seven-day transaction count surpassing 45,000 — the highest since late 2024. This increase in activity coincided with Bitcoin’s recent movement above $112,000, suggesting that traders are positioning themselves across a broader range of digital assets. The rise in deposits often signals upcoming trading activity, as funds are transferred to exchange wallets for potential swapping or trading [1]. Whether this translates into buying or selling will depend on how the broader market evolves in the coming days. The uptick could indicate growing interest in altcoins as traders look to capitalize on opportunities beyond Bitcoin amid its recent stagnation.

Bitcoin has seen a mixed performance in the past month. It reached a peak of $123,000 in July before retreating to around $117,000, while Ethereum recorded a 17.03% gain, pushing its price near $4,000 [2]. However, the broader market has seen a 1.53% decline in the past 24 hours, continuing a 4.59% weekly drop. This downward trend is attributed to ETF outflows, with $223 million withdrawn from crypto products, led by Bitcoin [2]. The recent volatility has prompted a cautious stance among investors, particularly in the wake of the sharp sell-off that erased over $1 billion in leveraged positions [2].

Bitcoin’s elevated funding rates indicate ongoing pressure from short-sellers and leveraged traders. Some analysts believe the current correction may represent a deliberate shakeout, clearing out weaker hands before a potential rally [3]. A few traders are optimistic that Bitcoin could reach $200,000 by the fourth quarter, citing rising Binance stablecoin reserves and the historically strong Q4 seasonality effect [4]. However, these projections remain speculative and are not supported by immediate market fundamentals.

Bearish momentum is also evident in Ethereum and other altcoins. For example, the ENAUSDT pair is showing strong downward movement, with sellers pushing the price toward new support levels [5]. This trend reflects broader market dynamics, where Ethereum’s position is being tested against regulatory and macroeconomic factors [2]. BNB, meanwhile, has shown resilience, hitting a new all-time high and attracting attention from traders who believe it could join the $2000 club this cycle [6]. However, its performance remains closely linked to Bitcoin’s price action, and any further downside in BTC could negatively impact altcoins, including BNB.

The overall decline in leverage on Binance suggests that traders are either locking in profits or cutting losses, reducing their exposure to high-volatility positions. This behavior is typical during market corrections and often precedes a period of consolidation. Whether this indicates a major crypto shakeout remains uncertain, but the data points to a phase of re-evaluation and risk management in the market [2].

Source: [1] title1 (https://www.newsbtc.com/news/binance-data-shows-decline-in-leverage-is-a-major-crypto-shakeout-coming/)

[2] title2 (https://m.economictimes.com/crypto-news-today-live-06-aug-2025/liveblog/123126163.cms)

[3] title3 (https://cryptodnes.bg/en/news/bitcoin/)

[4] title4 (https://ambcrypto.com/bitcoin-endures-10b-outflow-as-btc-bulls-aim-200k-in-q4/?amp&prefer_reader_view=1&prefer_safari=1)

[5] title5 (https://www.binance.com/en/square/hashtag/ENAUSDT)

[6] title6 (https://www.binance.com/en/square/post/27921712964033)