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Ahead Of The Curve
13 Oct 2025

Leverage cleared, what's next?

Record liquidation, record notional OI contraction. Typically, stagnation follows destabilizing events such as this crash. Nonetheless, with leverage rinsed, we are constructively bullish, favoring BTC spot accumulation in the weeks ahead.
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Leverage cleared, what’s next?
We have long cautioned about the dangerously high leverage in perpetual futures, and this week’s violent liquidation confirmed those warnings. The extreme unwinding culminated in a historic structural flush, with Binance’s BTCUSDT perpetual contract trading at a record 5.1% discount to spot, the widest deviation since March 13, 2020. Following this dramatic deleveraging, we are turning increasingly optimistic. With excessive leverage purged and structural risks reduced, the market setup now looks far healthier. We view the coming weeks as an opportune window for capital deployment into BTC, expecting the reset in perps and the normalization of funding dynamics to provide a constructive foundation for renewed upside momentum.
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