Bitcoin Deleveraging Marks a Turning Point, Open Interest Drops to 2022 Lows

A rarely seen scenario in the last three years is unfolding in the cryptocurrency markets: the aggregate open interest on Bitcoin has plummeted to levels not seen since the end of 2022, when the FTX collapse swept through the entire sector. This contraction represents a significant phenomenon of leverage reduction in the futures market.

The Data Confirms a Consolidation Phase

According to CryptoQuant’s analysis, major trading platforms have experienced significant decreases in their open interest for the first time in over three years. The numbers are telling: a leading platform reports a decline of 1.53 million BTC in the 30-day indicator variation, while others follow with contractions of 784,000 BTC, 505,000 BTC, and 395,000 BTC respectively.

The overall data provided by CoinGlass shows that the total open interest on BTC currently stands at $62 billion, in stark contrast to the all-time high of just over $94 billion reached on October 7. This reduction does not reflect simple fluctuations but a true process of closing speculative positions accumulated during the bullish phase.

Deleveraging: Not Always a Negative Signal

Contrary to what might seem at first glance, the elimination of leverage in this form can represent an opportunity rather than a threat. CryptoQuant analysts emphasize that when the market undergoes such organic deleveraging, it is generally followed by a stabilization phase or even a bullish reversal. Bitcoin, currently trading at $91,280 with a -2.05% change in the last 24 hours, shows a sideways movement that suggests exactly this consolidation dynamic.

The Necessary Reset After the Initial Rally

The beginning of January brought a broad surge. Bitcoin surpassed $94,000 on January 6, reaching a local high of $94,700. Technical indicators, such as the moving average convergence/divergence on monthly timeframes, had signaled a bullish orientation.

Santiment highlighted that announcements related to traditional investment instruments acted as catalysts, especially ETFs. When Morgan Stanley filed for an ETF on Ethereum, it generated momentum in ETH and altcoin prices in the short term. Ethereum reached $3,110 during this period.

However, the momentum could not be sustained indefinitely. Bitcoin’s drop below $90,000 triggered a cascade of liquidations, exceeding $450 million in a single day. Spot BTC ETFs in the US recorded net outflows of $1.12 billion over three consecutive days, according to SoSoValue data.

The Macroeconomic Context Influences Decisions

Market participants are consciously reducing risk ahead of upcoming US economic data, including the employment report and changes in interest rate expectations. This dynamic represents rational and structured behavior, not panic.

In the short term, the most likely scenario according to analysts remains a further consolidation phase or a moderate rebound, rather than an immediate bullish breakout. The declining open interest in futures markets, observable through an ascending indicator calculator, confirms that the market is recalibrating its positions toward more sustainable levels.

The current deleveraging phenomenon, although seemingly negative on the surface, could precisely represent the type of structural correction needed to lay the foundations for a longer-lasting and organic growth phase.