Analyst: Over the Past 3 Months, Derivatives Market Shows "Deleveraging Signals"; Resetting Market Structure May Indicate Formation of a Stage Bottom

Odaily News Cryptocurrency data platform CryptoQuant stated that over the past three months, the open interest in the Bitcoin derivatives market has been continuously declining, and market leverage levels have been gradually decreasing. This has created conditions for the overall market structure to shift towards a bullish outlook.

Since last October, Bitcoin derivatives open interest (OI) has fallen by 31%, which constitutes a "deleveraging signal" that helps eliminate excessive leverage accumulated in the market. The platform cited the view of crypto analyst "Darkfost": "Historical data shows that such deleveraging phases often mark the formation of significant bottoms, effectively resetting the market structure and building a more solid foundation for a potential bull market recovery."

The analyst believes this pattern may currently be repeating, but also added that if Bitcoin continues to decline and fully enters a bear market, "open interest could contract further, implying a deeper deleveraging adjustment and a continuation of the correction phase."