Bitcoin Open Interest Falls 31% In Bullish Deleveraging Signal

According to CryptoQuant, Bitcoin's open interest (OI) in derivatives markets has decreased by 31% over the last three months, which analysts view as a bullish deleveraging signal that purges excess market leverage. Historically, such contractions have often marked significant market bottoms, setting a stronger foundation for potential upward movement. Deleveraging involves unwinding risky positions, reducing the threat of cascading liquidations. This decline coincides with spot BTC prices gaining nearly 10% this year, suggesting the rally is supported by spot buying rather than unsustainable leverage. However, analyst “Darkfost” cautioned that if Bitcoin slides further into a bear market, OI could contract more, signaling a deeper correction. While OI across all exchanges is down about 28% from its October peak, options markets show bullish sentiment at the $100,000 strike price. Despite this, some analysts suggest the derivatives market has not yet entered a structurally bullish phase, viewing the current activity as a reactive response to recent price surges.

(Source：Cointelegraph)