Bitcoin Deleveraging May Be Laying the Groundwork for the Next Rally

[bonk]

Open interest in Bitcoin derivatives has fallen sharply over the past three months, a move that analysts say could be quietly strengthening the market. According to CryptoQuant, Bitcoin derivatives open interest is down 31% since October, signaling a broad deleveraging phase.

CryptoQuant analyst Darkfost describes this as a classic “market reset.” Historically, similar drops in leverage have often coincided with major market bottoms, flushing out excess risk and reducing the chance of cascading liquidations. While further downside could still cause open interest to contract more, the current reset is widely seen as a healthier foundation than a leverage-driven rally.

[chainsniff]

every “healthy rally” starts w less degens and more spot buyers