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IntoTheBlock’s head of research cautions that the market is showing signs of ‘being overheated,’ citing escalating leverage in both centralized and decentralized finance sectors. 
With Bitcoin’s (<a href="https://crypto.news/price/bitcoin/" target="_blank" rel="noreferrer noopener">BTC</a>) price retracing from its peak and dipping below $69,000, analysts at IntoTheBlock warn of the market showing signs of “being overheated,” sparking worries of a potential correction. 
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In <a href="https://twitter.com/LucasOutumuro/status/1768504693003522227?s=20" target="_blank" rel="noreferrer noopener">an X post</a> on Mar. 15, Lucas Outumuro, head of research at IntoTheBlock, addressed the increasing leverage in both decentralized finance (<a href="https://crypto.news/tag/defi/" target="_blank" rel="noreferrer noopener">defi</a>) and centralized finance (cefi) markets, indicating a looming adjustment. 
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 “Not only are meme tokens rocketing left to right, but the amount of leverage behind large cap assets has also quickly accelerated. This is evident in derivatives markets where borrow costs to go long have reached their highest since 2021.” 
 Lucas Outumuro 
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On centralized exchanges funding rates have “abnormally high” levels, Outumuro says, adding that even though exchange-traded fund (<a href="https://crypto.news/tag/bitcoin-etf/" target="_blank" rel="noreferrer noopener">ETF</a>) flows may continue carrying spot prices for the moment, the overly bullish positioning in derivatives “posts a warning sign for the market.” 
 You might also like: <a href="https://crypto.news/why-arent-large-bitcoin-holders-selling-despite-high-prices-insights-and-analysis/"> Why aren’t large Bitcoin holders selling despite high prices? Insights and analysis </a> 
Moreover, the surge in leverage extends beyond centralized exchanges to defi platforms. The aggregate debt issued through <a href="https://crypto.news/tag/aave/" target="_blank" rel="noreferrer noopener">Aave</a> v3 on Ethereum has more than doubled year-to-date, Outumuro noted. 
The analyst warns of a potential “Great Unwinding” in the crypto market, anticipating a 20% correction “as the amount of leverage in the system gets reset.” While the exact timing of such a correction remains uncertain, the escalating borrow costs serve as a cautionary signal for crypto investors to exercise prudence in their trading strategies, IntoTheBlock’s head of research noted. As of press time, Bitcoin is trading at $67,819, according to CoinGecko data. 
 Read more: <a href="https://crypto.news/crypto-market-cap-bitcoin-2025/"> Analyst: Crypto market cap to reach $7.5t, Bitcoin to hit $150k by 2025 </a>

Bitcoin retreats from record high amid analyst warnings of 20% market correction

crypto.news

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