Crypto-Native Traders Drive Bitcoin’s Record Deleveraging Event
On Friday, roughly $12 billion in Bitcoin futures positions were liquidated, marking the largest nominal deleveraging event in crypto history and hinting at a potential market bottom.
Open interest (OI) — the total value of outstanding futures and perpetual contracts — dropped from around $70 billion (560,000 BTC) to $58 billion (481,000 BTC). Considering Bitcoin’s price decline from $122,000 to $107,000, analyzing OI in BTC terms highlights the scale of the unwind.
Glassnode data shows this was the largest single-day deleveraging in USD terms and the second-largest in BTC terms, behind only the March 2020 COVID crash. The CME, used mostly by institutional investors, saw OI remain near 145,000 BTC. Binance, by contrast, saw OI fall sharply from $16 billion (130,000 BTC) to $12 billion (105,000 BTC), indicating crypto-native traders drove the sell-off rather than traditional finance participants.
Historically, large single-day drops in open interest have coincided with market bottoms, including the March 2020 COVID crash, China’s 2021 mining ban sell-off, and the FTX collapse in November 2022.
