Bitcoin Rally Lifts Crypto Market Above $3 Trillion

Bitcoin has led a cryptocurrency market surge back above $3 trillion in value for the first time since January. The rally, which began after the US Treasury's announcement to increase buybacks of long-dated bonds, has added over $740 billion to the market's worth.

Open interest in perpetual futures across tokens has climbed to nearly $160 billion, according to Coinglass data, with leverage building alongside gains. This increased leverage is raising concerns about rapid price swings and a potential pullback if open interest continues to accelerate faster than spot demand.

Ryan Lee, chief analyst at Bitget, warned that 'if open interest and funding keep accelerating faster than spot demand, the risk of a leverage-driven pullback increases.'

Despite this warning, traders have continued to pile into leveraged bets in perpetual futures. The unwinding of short positions has also led to a squeeze, which could fuel further upward pressure on prices.