The crypto market has ascended to a new all-time high of over $4.2 trillion in October. However, there is a growing list of red flags under the euphoria.
From soaring leverage to greedy sentiment levels and whale profit-taking, analysts warn that the market’s new heights could quickly turn fragile.
1. Record Leverage Signals Fragile Momentum
Data from Coinglass shows that total open interest has surged to a record $233.5 billion, even as spot trading volumes fall.
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This indicates that traders are leaning heavily on derivatives and margin to amplify short-term moves rather than investing outright.
According to CryptoQuant, Binance’s Estimated Leverage Ratio (ELR) has climbed to 0.187, the highest since July. This key metric reflects the average leverage used by traders on the platform.
Arab Chain, a CryptoQuant analyst, notes that this rise reflects the market’s growing risk appetite as Bitcoin approaches new all-time highs.
However, when leverage climbs above 0.18–0.20, history suggests a pullback is imminent, as cascading liquidations often follow any sharp price dip.
Retail investors are driving much of this activity, hoping to capitalize on the uptrend, while institutions appear to be reducing leverage to preserve capital. The split reveals a market chasing quick profits on increasingly shaky ground.
2. Greedy Sentiment Reaches Peak Levels
Meanwhile, the Fear and Greed Index has surged to 70, placing the market squarely in the “greedy” zone.
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While this signals optimism, it also often marks exhaustion points where traders become overconfident.
Historically, readings above 70–80 have preceded cooling phases, a sign that sentiment may be running too hot for comfort.
3. OG Whales Are Taking Profits
Elsewhere, on-chain activity shows long-term holders, often dubbed “OG whales,” have started moving and selling substantial Bitcoin holdings.
Maartunn, another CryptoQuant analyst, reported that new and old whales realized over $800 million in profits during the first three days of October.
Further,15,000 BTC, valued at approximately $1.88 billion, flowed into exchanges. This points to large players moving funds.
Meanwhile, Lookonchain revealed that while Bitcoin ascended to a new all-time high above $126,000, a dormant whale moved 100 BTC ($12.5 million) after 12 years of inactivity.
“A Bitcoin OG just moved 100 BTC ($12.5M) to 2 new wallets after 12 years of dormancy. He originally received 691 BTC ($92K then, now $86M) 12 years ago, when BTC was just $132,” the post read.
When old wallets awaken during a rally, it often signals that seasoned investors are securing profits. This pattern has preceded market corrections in the past.
4. The Dollar’s Comeback Threat
While crypto soared 12% above its 2024 highs, the US Dollar Index (DXY) dropped nearly the same amount, but is now rebounding.
Sponsored SponsoredAnalysts such as Axel Adler and The Great Martis warn that the dollar could regain strength as Europe faces economic headwinds and US fiscal uncertainty persists. A stronger dollar typically pressures risk assets, including crypto.
“The dollar index rose above 98 as investors assessed the economic implications of the ongoing government shutdown,” wrote Adler.
In the same tone, Daan Crypto Trades says that the devaluation of the denominator may have fueled the crypto rally. If the dollar strengthens again, that tailwind could fade fast.
5. The “1999 Moment” Warning
Elsewhere, billionaire investor Paul Tudor Jones compared today’s crypto market to the 1999 dot-com bubble. While he admitted Bitcoin remains very appealing, his analogy mirrors the risk of a speculative climax.
With Bitcoin near $126,000 and market sentiment at a fever pitch, concerns linger not about whether crypto is strong but about whether it is too strong.
History suggests that when greed, leverage, and whale exit align, the next chapter often brings a shakeout before the next surge.
