Monero leverage nears level seen before January's crash

Leveraged bets on monero are piling up again: open interest in XMR futures has climbed above $300 million, close to the roughly $320 million record set in January, according to SoSoValue data cited by CoinDesk. The tally has only crossed $300 million a handful of times, all of them this year.

What the data show

• In dollars: more than $300 million of open futures positions.
• In coins: 515,730 XMR, a five-week high and up from about 400,000 XMR a week earlier — so the rise is not just a side effect of a higher price.
• Price: monero recently climbed above $600, its highest since January, giving the privacy coin a market value of about $10.9 billion.

Monero had already gained more than 15% over the seven days to Tuesday, as we noted in our Tuesday market wrap.

Our take

Rising open interest alongside a rising price usually means traders are adding long positions with borrowed money. That works while the price climbs. When it dips, exchanges start force-closing the weakest longs, and those liquidations add selling pressure that can trigger the next round — the cascade we described in the near-$1 billion liquidation day.

January is the obvious warning. Monero peaked near $790 on Jan. 14 with open interest at a record, then fell below $300 by the first week of February, a drop of about 66%. Pseudonymous analyst Doctor Profit has pointed to the same parallel and expects a large liquidation event.

That doesn't make a repeat inevitable. Leverage can unwind slowly, and positioning data don't tell you which side will be squeezed. But the set-up means sharp moves in either direction are more likely than usual, which matters for anyone trading XMR with margin. If you're unsure how these contracts work, read what perpetual futures are before touching them.