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Bitcoin Open Interest Hits 2-Year High While Ethereum Breaks ATH Record
Bitcoin’s recent price weakness may extend further as dangerous leverage conditions emerge alongside a significant shift toward Ethereum, according to fresh analysis from K33 Research. The warning comes as ETH breaks new ground while BTC struggles with mounting pressure from overleveraged positions.
Dangerous Leverage Buildup Signals Risk
K33 Head of Research Vetle Lunde reported that notional open interest in bitcoin perpetual futures has rocketed to a two-year peak exceeding 310,000 BTC (approximately $34 billion). This represents a substantial increase of 41,607 BTC over just two months, with a particularly sharp weekend spike of 13,472 BTC marking what could be a critical turning point.
The leverage surge coincides with annualized funding rates jumping from 3% to nearly 11%, indicating increasingly aggressive long positioning despite relatively stagnant price action. Lunde draws parallels to similar leverage buildups during the summers of 2023 and 2024, both culminating in severe liquidation cascades throughout August.
However, this cycle’s peak arrives later in the month, suggesting a potentially prolonged consolidation phase that could surprise dip buyers. “The risks of long squeezes in the near term are elevated,” Lunde cautioned.
Massive Whale Rotation Fuels Ethereum Rally
Contributing to market volatility, a long-term holder executed a massive rotation, swapping 22,400 BTC for ETH through decentralized exchange Hyperunit last week. This whale activity helped propel Ethereum to a new all-time high of $4,956 over the weekend, ending a 1,380-day drawdown period.
The ETH/BTC ratio surged above 0.04 for the first time in 2025, highlighting Ethereum’s current relative strength. Despite this impressive USD rally, Ethereum’s longer-term performance against Bitcoin remains challenged, with 1-, 2-, and 3-year rolling ETH/BTC returns still negative.
Market Cycle Concerns Emerge
Historically, ETH all-time highs have coincided with broader crypto market peaks, as seen in 2017 and 2021 cycles. These patterns typically feature Ethereum breakouts, altcoin surges, and Bitcoin stagnation amid declining demand.
However, BTC dominance remains elevated at 58.6%, compared to sub-40% levels during previous peaks, suggesting the current cycle may differ from historical precedents.
