Bitcoin open interest falls 30%, setting up bullish recovery: Analyst
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.