Darkfost2026-02-28

Ethereum derivatives market contracts as risk appetite fades

The global backdrop is gradually deteriorating, and altcoins are the first to feel the impact, with Ethereum leading the decline. Friday’s PPI data, showing Core PPI MoM at +0.8%, confirmed that inflationary pressures remain persistent and that demand continues to hold up. Such a reading suggests that the Federal Reserve is unlikely to proceed with a rate cut in the near term. Markets must therefore price in a prolonged restrictive monetary environment, which mechanically weighs on risk assets. Adding to this, tensions between the United States and Iran intensified over the weekend, further increasing uncertainty at a time when visibility was already limited. In this environment, the crypto market, and particularly the derivatives segment, has not been spared. On Ethereum, Open Interest expressed in ETH terms across all exchanges declined from 7.79M to 5.8M, with 2M concentrated solely on Binance. This contraction reflects a significant reduction in exposure and a broad deleveraging process. Notional Open Interest, which incorporates ETH price evolution, experienced an even sharper decline. Binance saw its Open Interest drop from $12.6B to $4.1B, yet it still maintains clear dominance with nearly 35% of total open interest. This dynamic is widespread across major exchanges. Bybit, representing around 15% of total open interest, saw its OI divided by three to $1.9B. Gate.io fell from $5.2B to $2.75B, accounting for roughly 23% of the total. Altogether, these figures point to a clear deleveraging phase on Ethereum. The derivatives market is contracting rapidly, signaling an active leverage unwind and a pronounced shift toward risk aversion within a macro environment that remains structurally unfavorable for renewed risk exposure.