BTC Open Interest Drops 30%, Signaling Potential Bullish Rebound: Analyst
Analysts view BTC’s open interest dropping by about 30% since its October highs as a excellent sign of deleveraging. According to from on-chain analytics firm CryptoQuant, this drop is viewn as a reduction in too much leverage, which might set the stage for a market comeback.
says the 31% drop is part of a broader effort to eliminate hazardous positions that could assist stabilise the market. Open interest, which shows how much money is tied up in BTC derivatives contracts that haven’t been settled yet, has dropped significantly, much as it did in past market cycles.
Deleveraging as a Way to Reset the Market
CryptoQuant’s recent cited crypto expert Darkfost, who noted that such declines have been significant in the past. Darkfost said, “In the past, they have often marked significant bottoms, effectively resetting the market and giving it a stronger base for a possible bullish recovery.”
This point of view holds that the current deleveraging could signal the end of a corrective phase, allowing the market to resume its upward move.
Darkfost, on the other hand, has issued a warning, saying that if BTC’s value keeps falling and enters an accurate bear market, open interest could drop further. This could mean more deleveraging and a more extended adjustment period, underscoring how fragile the current situation is.
means reducing leveraged investments to lower the risk of cascading liquidations, which can worsen price declines. The abrupt market drop on October 10 was a recent example of how such events can occur.
Surge and Then Drop Back in 2025
The reason for this dip is that BTC’s open interest grew very rapidly in 2025. CryptoQuant open interest hit an all-time high of over $15 billion on October 6. This was over three times the highest of $5.7 billion that Binance saw at the November 2021 bull market top.
Speculation in the drove this rise. But when prices rise as open interest declines, it usually means leveraged short positions are being closed or liquidated. Traders who bet against BTC have to leave with a loss, which lowers tradeing pressure and shifts momentum towards spot purchasing.
People think this dynamic is bullish because it leads to a longer-lasting rally driven by real demand rather than leverage. In fact, BTC’s price has risen almost 10% since the beginning of the year, which supports this view.
Current Market Metrics and Warnings
According to , the total open interest in BTC across all platforms is presently at $65 billion. This is a 28% drop from its peak of almost $90 billion in ahead October.
The $100,000 strike price on the Deribit options platform has the most open interest, with a notional value of $2.2 billion. There are more long call options than short put options, which suggests traders expect prices to rise.
Even with these signs, not all opinions are the identical. Greeks Live, a company that offers , said that the market has not yet entered a structurally positive phase. The company said, “The current trading structure looks more like a reaction to the sudden surge, and the long-term outlook is still not moving towards a “
People who trade BTC will be keeping a close eye on it during this period of adjustment to view whether it continues to recover or goes down again. The process of deleveraging may hurt in the short term, but it could make the asset’s foundation stronger in the long term.
