- CryptoQuant reports a roughly 31% drop in Bitcoin derivatives open interest since October, signaling market deleveraging.
- Analyst Darkfost said this deleveraging can “effectively reset the market” and form a stronger base for recovery, while warning OI could fall further if prices decline.
- Bitcoin open interest reached an all-time high above $15 billion on Oct. 6, and Binance OI nearly tripled versus its November 2021 peak of $5.7 billion.
- Total Bitcoin OI across exchanges is about $65 billion, down roughly 28% from a peak near $90 billion, per CoinGlass.
- Deribit shows options OI largest at the $100,000 strike (about $2.2 billion), and derivatives provider Greeks Live says markets are not yet structurally bullish.
CryptoQuant reported on Wednesday that open interest in Bitcoin derivatives has fallen about 31% since October, a move it calls a deleveraging signal that trims excess leverage and can reduce the risk of cascading liquidations. The data and analyst commentary link the decline to a potential strengthening of market structure after a period of speculative buildup.
The analyst known as Darkfost said, “Historically, they have often marked significant bottoms, effectively resetting the market and creating a stronger base for a potential bullish recovery.” The analyst also cautioned that “open interest could contract further, signaling deeper deleveraging and a potential extension of the correction.”
Open interest surged during last year’s speculative rally, topping more than $15 billion on Oct. 6, and nearly tripling from Binance’s November 2021 peak of $5.7 billion. During rallies where prices rise while OI falls, the trend often reflects short-covering and spot buying rather than new leveraged longs, which can make price moves more sustainable.
Spot Bitcoin prices have gained almost 10% since the start of the year, consistent with a short-covering explanation. Meanwhile, total Bitcoin OI across exchanges stands near $65 billion, down about 28% from a peak just above $90 billion, according to CoinGlass.
On options markets, Deribit shows the highest open interest at the $100,000 strike with roughly $2.2 billion notional, indicating more call than put exposure at that level. Still, derivatives provider Greeks Live said, “The current trading structure appears more like a reactive response to the sudden surge, with the long-term outlook still not shifting toward a bull market.”
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