Darkfost
Deleveraging signal as BTC OI drops by 31%
The year 2025 has been remarkable for the crypto market, marked by intense speculation and record trading volumes. On Binance alone, futures trading volumes exceeded $25 T. Bitcoin, of course, was among the leading assets in terms of trading activity. This speculative frenzy translated into an explosion of Bitcoin’s open interest (OI), reaching an all-time high of over $15B on October 6. To put this into perspective, during the previous bull cycle in November 2021, when Bitcoin hit its ATH, open interest on Binance peaked at $5.7B. In other words, OI nearly tripled in 2025. Since that peak, open interest has dropped by more than 31%, stabilizing today around $10B. This decline, amplified by massive liquidations, triggered a deleveraging phase, with OI falling below its 180-day moving average. These deleveraging periods are crucial, as they help purge the excess leverage built up in the market. Historically, they have often marked significant bottoms, effectively resetting the market and creating a stronger base for a potential bullish recovery. This could be the case again, but caution is warranted. If Bitcoin continues to slide and fully enters a bear market, open interest could contract further, signaling deeper deleveraging and a potential extension of the correction.