Bitcoin Open Interest Falls 30%, Setting Up Bullish Recovery: Analyst (2026)

Bitcoin derivatives open interest fell 30% from October highs as deleveraging purged excess leverage, historically signaling market bottoms and recovery.

Open interest in Bitcoin derivatives markets has declined over the past three months, resulting in dwindling leverage that has become bullish for the overall market structure, according to CryptoQuant.

A 31% decline in open interest (OI) on Bitcoin derivatives since October is a “deleveraging signal” which helps purge the excess leverage built up in the market, said the on-chain analytics provider on Wednesday.

“Historically, they have often marked significant bottoms, effectively resetting the market and creating a stronger base for a potential bullish recovery,” said crypto analyst “Darkfost,” who was quoted in the post.

The analyst said that this could be the case again, but cautioned that if Bitcoin (BTC) continues to slide and fully enters a bear market, “open interest could contract further, signaling deeper deleveraging and a potential extension of the correction.”

OI refers to the number or value of crypto derivatives contracts that have yet to be settled and remain “open.” Deleveraging is the unwinding of risky positions, reducing the risk of cascading liquidations that could trigger sharp price drops, as was seen in the Oct. 10 crash.

Last year’s crypto derivatives “speculative frenzy” resulted in a surge in Bitcoin’s open interest, which reached an all-time high of over $15 billion on Oct. 6, the analyst noted.

During the previous bull market peak in November 2021, BTC open interest on Binance peaked at $5.7 billion, meaning that OI nearly tripled in 2025.

Related: Bitcoin hits 2026 high above $97K, data shows sufficient fuel for higher prices

During a price rally with declining open interest, it often means leveraged short positions are being liquidated or closed.

Source: CoinTelegraph