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Altcoin leverage has swelled to unprecedented levels, setting the stage for violent swings if momentum cracks, according to a July 23 report by Glassnode.
The report highlighted that the combined futures open interest across Ethereum (ETH), Solana (SOL), XRP, and Dogecoin (DOGE) increased from $26 billion at the start of July to $44 billion, representing a 69% surge.
Daily increases have stayed above the two‑standard‑deviation mark for 12 straight sessions, the longest run on record, suggesting that traders are aggressively piling into leveraged bets.
Notably, that positioning is getting expensive. Long-side futures traders have paid roughly $32.9 million in cumulative funding over the past month, nearing the $42 million tab seen around Bitcoin’s March peak and still below the $70 million blow‑off in late 2024.
Elevated funding signals conviction, but it also means a crowded trade that can unwind quickly if prices stall or reverse.
Speculation is rotating away from Bitcoin (BTC). Ethereum’s share of aggregate open interest has climbed to 38% against Bitcoin’s 62%, its highest reading since April 2023, with only 5% of days printing a larger ETH share.
Perpetual volume has tilted even further. Ethereum has just overtaken Bitcoin in volume dominance for the first time since the 2022 cycle low, marking the largest skew toward ETH on record.
The report noted that this shift reflects traders seeking higher beta as Bitcoin cools after a surge to an all-time high earlier this month, a move that pushed its realized capitalization above $1 trillion for the first time before price action settled below the peak.
Bitcoin still accounts for more than 64% of total crypto market value, a concentration that could cap altcoin momentum if BTC weakens.
Glassnode’s Altseason Indicator flipped positive on July 9 and has stayed there, triggered by concurrent inflows to Bitcoin and Ethereum, rising stablecoin supply, and a momentum crossover in aggregate altcoin market cap.
Altcoins added $216 billion in value over the last two weeks, one of the largest dollar gains on record.
Yet, sector correlations show that most altcoins are moving in lockstep with each other while decoupling from Bitcoin, a pattern that often leaves the complex system vulnerable to fragility.
When leverage is stretched and assets trade as a single block, even modest shocks can cascade through forced liquidations.
The report framed the setup plainly, stating that the altcoin rally is real, but traders buying the upside should be prepared for high incoming volatility leading to significant downside.
