Crypto-Native Traders Fuel Bitcoin’s Largest Deleveraging on Record
Friday saw approximately $12 billion in Bitcoin futures positions liquidated, marking the largest nominal deleveraging event in crypto history and potentially signaling a market bottom.
Open interest (OI) — the total value of outstanding futures and perpetual contracts — fell sharply. Before the sell-off, Bitcoin’s OI stood near $70 billion (560,000 BTC). After the event, it dropped to $58 billion (481,000 BTC). Adjusting for BTC terms gives a clearer picture of the scale, considering Bitcoin’s price fell from $122,000 to $107,000 during the session.
Glassnode data shows Friday’s deleveraging was the largest single-day drop in USD terms and the second-largest in BTC terms, trailing only the March 2020 COVID crash. The CME, primarily used by institutional investors, saw OI remain steady at roughly 145,000 BTC, while Binance experienced a significant decline from $16 billion (130,000 BTC) to $12 billion (105,000 BTC). This indicates the sell-off was concentrated within crypto-native trading activity rather than traditional finance.
Historically, similar sharp drops in open interest have often coincided with market bottoms, including the March 2020 COVID crash, China’s 2021 mining ban sell-off, and the FTX collapse in November 2022.
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