Bitcoin Open Interest Plunges to Lowest Level Since August as Market Leverage Contracts
Binance OI falls below 100,000 BTC, signaling reduced risk-taking among traders.
Bitcoin’s (BTC) open interest (OI) has dropped to 413,000 BTC ($36 billion), its lowest level since August, according to Glassnode data. Open interest measures the total capital locked in active futures contracts, providing insight into leverage and speculative activity in the market.
Since futures contracts are denominated in U.S. dollars, their value fluctuates with Bitcoin’s price. To neutralize these fluctuations, analysts often measure open interest in BTC terms, offering a clearer picture of market leverage.
Over the past few months, Bitcoin open interest has steadily declined, falling from 546,000 BTC in November to its current level. A significant portion of this drop stems from the unwinding of CME-based futures positions, particularly those linked to basis trade strategies.
Bitcoin’s price volatility during this period—dropping from $109,000 to $78,000 before rebounding to $90,000—suggests that recent price movements have been primarily driven by spot market demand rather than excessive leverage.
Binance, the second-largest derivatives exchange by open interest, has also seen a sharp decline, with its OI dropping to just over 100,000 BTC—the lowest in over a year. This suggests that retail traders have significantly reduced their leveraged exposure in response to increased volatility and market uncertainty.
Additionally, Bitcoin’s open interest as a percentage of total market capitalization has fallen below 2% for the first time since February 2024, reinforcing a broader trend of declining speculative activity in favor of spot-driven trading.
