Monero futures are again heating with leverage, raising volatility risks

Leveraged bets are building up in monero (XMR) futures, raising the odds of a sharp, sudden move in the price.

Monero (XMR) is a cryptocurrency built for privacy. Its transactions are hard to trace and at the market cap of $10.9 billion, it is the second-largest privacy coin in the world.

Notional open interest, or the dollar value of the number of active monero futures bets, has risen past $300 million, approaching the January peak of around $320 million, according to data source SoSoValue. Futures are contracts that let traders bet on a coin’s price without owning it. To date, the tally has topped $300 million only a few times, all this year.

“The last Time we reached that amount of Open Interest was in Jan 2026. Monero Crashed 66% in the next 20 days. I Smell a very big Liquidation Event on XMR,” said pseudonymous crypto analyst Doctor Profit, who correctly called BTC’s 2025 top and pivoted to accumulation in July this year.

Open interest is tracked in dollars and in coins. Traders use the two differently. The dollar figure shows the current size of the market’s positions and lets traders compare monero with other cryptocurrencies. Liquidations are also typically reported in dollars, so a larger dollar figure points to a larger potential wave of forced selling. Open interest is also rising in coin terms. At 515.73K XMR, it is at a five-week high and up sharply from 400K XMR a week ago.

Liquidations, or forced closure of positions by exchanges, happen because futures involve leverage, in which a trader puts up a small deposit, called margin, to control a much larger position.

This leverage boosts gains when the market moves as expected, but when it doesn’t, the margin is eaten away. At some point, the exchange steps in and closes the position to prevent the trader’s losses from exceeding the collateral they posted and to protect the exchange from unpaid losses.

Traders betting on a rise, called longs, get liquidated when the price falls. The liquidation, in turn, adds to selling pressure in the market. This is especially true when most traders are long. In such cases, a slight price decline can trigger mass liquidation of longs and a price crash.

That’s what happened in January when open interest hit a record high alongside a price rise, reflecting an overcrowding of longs. The spot price hit a high of around $790 on Jan. 14. By the first week of February, it had crashed to under $300. This was characterized by liquidation of longs worth several million dollars, according to Coinglass.

This time too, the spot price has risen with the open interest. Monero recently topped $600, the highest since January.

Whether history repeats remains to be seen.