According to CryptoQuant, open interest in Bitcoin derivatives markets has declined over the past three months, resulting in sinking leverage that has turned bullish for the overall market structure.
The 31% decline in open interest (OI) in Bitcoin derivatives since October is a “deleveraging signal” that helps remove excessive leverage accumulated in the market, he said on-chain analytics provider on Wednesday.
“Historically, they have often marked significant bottoms, effectively resetting the market and creating a stronger foundation for a potential bullish recovery,” said cryptocurrency analyst “Darkfost” quoted in the post.
The analyst said this could happen again, but cautioned that if Bitcoin (BTC) continues to decline and enters a full bear market, “open interest could contract further, signaling deeper deleveraging and a potential extension of the correction.”
OI refers to the number or value of cryptocurrency contracts that have not yet settled and remain “open”. Deleveraging is the unwinding of risky positions, reducing the risk of cascading liquidations that could cause pointed price declines, as seen in the October 10 crash.
Interest in open-source bitcoins triples in 2025
The analyst noted that last year’s “speculative frenzy” in cryptocurrency derivatives resulted in an boost in open interest in Bitcoin, which on October 6 reached an all-time high of over $15 billion.
During the previous bull market peak in November 2021, BTC open interest on Binance peaked at $5.7 billion, meaning OI has almost tripled in 2025.
Related: Bitcoin reaches 2026 level above 97 thousand. dollars, the data shows enough fuel for higher prices
When prices rise and the percentage of open interest falls, this often means liquidation or closing of leveraged tiny positions.
Traders who bet on Bitcoin exit their positions at a loss, which removes selling pressure from the market. The “short leverage” scenario may be hopeful because it suggests that the price boost is due to spot purchases rather than excessive leverage, making the boost more sustainable.
That seems to be the case at the moment, as BTC spot prices are up almost 10% since the beginning of this year.
Derivatives are not in the bull market yet
Bitcoin’s total OI across all exchanges and all derivatives markets is currently approximately $65 billion, According to to CoinGlass. This is down about 28% from a peak of just over $90 billion in early October, according to CryptoQuant’s percentage decline data.
In Deribit Bitcoin OI options markets it is highest at a strike price of $100,000, which has a par value of $2.2 billion, suggesting that investors are bullish because there are more long bets (calls) than tiny bets (puts).
However, the derivatives market “has not yet entered the structurally upward phase”, reported cryptocurrency derivatives provider Greeks Live on Wednesday.
“The current trading structure looks more like a reactive response to a surge, with the long-term outlook still not shifting towards a bull market,” they added.
Warehouse: Trump rules out SBF pardon, Bitcoin in ‘tedious sideways’: Hodler’s Digest
