How does the change in leverage trading ratios in the market affect the degree of price volatility? Leverage amplifies both gains and losses, making it a key driver of market dynamics. When leverage ratios rise, traders can control larger positions with less capital, often leading to heightened price swings as speculative activity increases. This can exacerbate volatility, especially in bullish or bearish trends, as over-leveraged positions may trigger rapid liquidations during sudden price drops. Conversely, lower leverage ratios tend to stabilize markets by reducing risk exposure, dampening extreme fluctuations. Empirical data from crypto and stock markets shows a strong correlation between high leverage and sharp volatility spikes, particularly during periods of uncertainty. However, the exact impact depends on market conditions, trader behavior, and external factors like regulatory shifts or macroeconomic events.