Crypto Traders, Not Institutions, Fuel Bitcoin’s Largest Deleveraging
Friday witnessed roughly $12 billion in Bitcoin futures liquidations, marking the largest nominal deleveraging in crypto history and signaling a potential market bottom.
Open interest (OI) — the total value of outstanding futures and perpetual contracts — fell from $70 billion (560,000 BTC) to $58 billion (481,000 BTC). Adjusting for Bitcoin’s price drop from $122,000 to $107,000, the scale of the unwind becomes even clearer in BTC terms.
Data from Glassnode shows this was the largest single-day deleveraging in USD terms and the second-largest in BTC terms, behind only the March 2020 COVID crash. The CME, primarily used by institutional investors, saw OI remain steady at roughly 145,000 BTC. Binance, however, saw OI fall sharply from $16 billion (130,000 BTC) to $12 billion (105,000 BTC), highlighting that crypto-native traders, not traditional finance participants, drove the sell-off.
Historically, such sudden drops in open interest often coincide with market bottoms, as seen during the March 2020 COVID crash, China’s 2021 mining ban, and the FTX collapse in November 2022.
