Bitcoin on the Brink: The End of the Leverage Party is Nigh! 🚨

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Willy Woo, the resident expert on all things Bitcoin, had the audacity to suggest on June 2nd that “Now is a bad time to take paper bets on BTC.” Yes, that’s right, the man who’s spent his life analyzing crypto charts just slapped down the golden goose of speculation.

Apparently, it’s “open season on liquidation hunts” thanks to the delightful chaos of high-stakes gambling in the crypto world. Woo, ever the poet, claimed Bitcoin is “waiting to purge the bets before the next swing of all-time-highs.” How quaint. It’s as if the blockchain itself is cleaning house before a grand resurgence. Ah, the beauty of crypto volatility—so much drama, so little substance.

For those unversed in the arcane lingo of derivatives, “paper bets” refer to those daring souls who engage in futures, options, and perpetual contracts. They bet on BTC’s future without ever actually touching it. Just like an armchair general, really. Woo had a delightful metaphor for these traders: “casino hitchhikers.” How charming. Of course, with these types onboard, the good old BTC price is finding it rather difficult to lift itself to new heights.

NOW is a BAD TIME to take paper bets on BTC.

It’s open season on liquidation hunts due to high levels of betting.

BTC is waiting to purge the bets before the next swing of all-time-highs.

Chart: paper bets on BTC, hard to move up with too many casino hitchhikers onboard.

— Willy Woo (@woonomic) June 2, 2025

Leverage Flush Imminent

Ah, the sweet scent of leverage in the air. It’s what most derivatives traders use to amplify their bets. Unfortunately, this leads to markets getting as hot as a summer in the Sahara, and when it all unravels, the volatility is enough to make one’s hair stand on end.

Remember the $100 million liquidation of Hyperliquid whale trader James Wynn last week? No? Well, let’s just say Woo wasn’t shy about pointing out the obvious: low buying pressure means whales (yes, those monstrous traders) have free reign to push prices around. And add in some juicy incentives for liquidations? Oh, it’s the perfect recipe for a liquidation hunt, folks. Yee-haw!

“In neutral environments, it’s easy to move price, especially weekends and summer months,” he said before warning:

“Now add incentives to make money through liquidations, it’s the perfect setup for liquidation hunts NOW.”

Bitcoin open interest (OI)—that delightful measure of futures contracts—reached an all-time high of $80 billion on May 23, according to Coinglass. It’s since dipped to a measly $72 billion, but no matter; the market’s still awash in leverage. More paper bets, more fun, more chaos. It’s as if speculators are all playing musical chairs, and when the music stops, oh, the carnage.

When the price of BTC moves against these over-leveraged positions, liquidations follow faster than a cat on a hot tin roof. This delightful cascade of liquidations can cause a price crash. Think of it as the crypto equivalent of a bad sitcom plot—everything goes wrong, and it’s wildly entertaining for onlookers, if not for the participants.

BTC Price Outlook

In the spirit of perpetual optimism, Bitcoin has managed to eke out a minor gain today, reaching an intraday high of $106,450 before retreating to $105,350 during Tuesday morning trading in Asia. Classic Bitcoin, always keeping us on the edge of our seats.

Since its dramatic plunge from the all-time high of May 22, Bitcoin has been content to languish at current levels. But don’t let that lull you into a false sense of security, folks. It could still get bumpy, especially if Woo’s “casino hitchhikers” get their comeuppance.

Meanwhile, the M2 money supply has decided to hit a new all-time high of $21.86 trillion. Ah, the sweet smell of inflation! This is great news for risk-on assets like crypto, and who doesn’t love a little bit of risk with their breakfast?

M2 Money Supply hits new all-time high of $21.86 Trillion

— Barchart (@Barchart) June 3, 2025

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2025-06-03 09:21