New research indicates that Bitcoin (BTC) exchanges are undergoing a significant “deleveraging event,” which may influence future price movements.
In a “Quicktake” blog post dated March 17, the onchain analytics platform CryptoQuant reported a $10 billion capitulation within Bitcoin futures markets.
An “Essential” Moment for Bitcoin Price Recovery
Since BTC/USD reached its all-time highs in mid-January, Bitcoin derivatives traders have adopted a notably risk-averse stance.
CryptoQuant, leveraging data from prominent crypto exchanges, assesses that the total open interest (OI) in futures decreased by $10 billion in just three weeks, from February 20 to March 4.
“On January 17th, Bitcoin’s open interest hit a record of over $33B, reflecting unprecedented leverage in the market,” contributor Darkfost notes.
The decline, he suggests, “can be interpreted as a natural market reset, a vital phase necessary for maintaining a bullish trajectory.”
Bitcoin futures OI data from leading exchanges. Source: CryptoQuant
An accompanying chart illustrates the 90-day rolling change in total OI, emphasizing the market’s abrupt turnaround after its record highs.
“Currently, the Bitcoin futures open interest has experienced a steep decline, now standing at -14%,” Darkfost concludes.
“Historical trends reveal that each deleveraging episode like this has generated favorable opportunities for the short to medium term.”
Emergence of a Crypto “Demand Crisis”
Additionally, CryptoQuant contributor Kriptolik noted a growing activity in derivatives markets since November 2024.
Related: Peak ‘FUD’ suggests a $70K support level — 5 Key Insights on Bitcoin This Week
This week, he disclosed that stablecoin reserves across derivatives exchanges are on the rise, even exceeding those in spot markets, but this does not necessarily lead to a price surge.
“An analysis of the volume and circulation of stablecoins, which serve as market fuel, shows that despite a significant increase in total stablecoin supply since November 2024, this has not translated into substantial benefits for the market or its investors,” according to another blog entry.
Kriptolik characterized spot markets as facing a “demand crisis.”
“Until this distribution stabilizes, steering clear of high-leverage (high-risk) trades may be the most prudent strategy,” he added.
Stablecoin reserves across exchanges (screenshot). Source: CryptoQuant
This article does not offer investment advice or recommendations. All investment and trading actions involve risk, and readers should conduct their own research before making decisions.
