Bitcoin Drops $8B In Open Interest : Capitulation Phase ?

The crypto market gave way under the pressure of its own leverage. In a few days, nearly 8 billion dollars of open interest on Bitcoin futures contracts were liquidated, triggering a brutal purge of speculative positions. Behind this shock, a rebalancing is emerging, suggesting that a stabilization cycle could begin.

A brutal reset of the bitcoin derivatives ecosystem

The recent collapse of the crypto derivatives market has strongly impacted the dynamics of the bitcoin price .

According to data from CryptoQuant, the total amount of open interest on Bitcoin futures fell from $37 billion to $29 billion , a decrease of $8 billion.

This decline reflects a massive liquidation of leveraged positions, which XWIN Research Japan describes as a “widespread liquidation of leveraged positions”, allowing to “reduce systemic risk within the market”. The most fragile positions were forced to unwind under the pressure of a brutal correction, causing a real market cleanup.

Key indicators clearly show that this correction was accompanied by a massive capitulation phenomenon. Several signals confirm this interpretation :

• Daily losses exceeding $900 million for short-term holders, according to XWIN Research data ;

• The MVRV ratio dropped to 1.54, a level historically associated with undervalued market phases ;

• The Fear & Greed Index at its lowest point in nine months, reflecting an extreme level of pessimism ;

• A massive withdrawal of speculative positions, favoring a healthy purge of the derivatives market.

This forced market rebalancing could mark the end of a speculative excess cycle, potentially opening the way to a new more rational phase less exposed to systemic risk. Structural elements and on-chain data seem to indicate an attempt to consolidate on firmer grounds.

A discreet accumulation and signs of a possible recovery

While short-term traders were shedding their positions under liquidation pressure, other players saw this correction as a strategic accumulation opportunity.

Still according to XWIN Research Japan, investors holding between 10 and 1,000 BTC (whales) took advantage of this drop to strengthen their positions. This behavior sharply contrasts with that of short-term holders caught in a panic spiral. The accumulation by these intermediate actors signals an important presence in the market, even at the height of the correction.

Alongside these fund movements, the crypto price showed signs of stabilization after a 20 % drop over the month. According to analysis by Daan Crypto Trades, a significant liquidity zone formed between $97,000 and $98,000, historically marked by high selling volumes. For the market to consider a rebound towards psychological levels like $100,000, it would first have to reconquer resistance levels located between $93,000 and $94,000.

This correction, however violent it may be, could mark a turning point. By eliminating excess leverage, it paves the way for a potentially healthier market, driven by discreet but active accumulation. The question remains whether this consolidation phase will open the door to a new bullish cycle.