Estimated Leverage Ratio (ELR) is calculated by dividing the open interest of futures contracts by the exchange balance. So, it’s not the actual leverage ratio but rather a way to infer the overall leverage level. Looking at the data, the ELR in this cycle so far is lower than the previous cycle, roughly equivalent to the level at the end of August 2022. But it’s not exactly low either—almost on par with the bull market at the end of 2024. Will the ELR continue to rise? I think it’s possible. Because the closer we get to the end of a bear market, the more intense the tug-of-war between longs and shorts becomes. Both sides are determined to win, and the “calling each other idiots” script is often already written in advance. Until that final “moment,” when the ELR drops sharply, clearing out the leverage. Only then does spot demand gradually take the lead, and everything starts to get back on track. I wonder if this cycle will follow the same script as well?.......