Bitcoin futures open interest plummets 55%, marking the largest decline in nearly three years

The open interest in Bitcoin futures has plummeted 55% from its peak in October 2025, marking the largest decline since April 2023.
Data from CoinGlass shows that the total open interest in Bitcoin futures has decreased from over $94 billion at its October 2025 peak to $44 billion, a 55% drop, the largest in three years.
An increase in open interest typically indicates new capital flowing into the derivatives market, boosting trader confidence. Conversely, a decline in open interest suggests traders are reducing leverage and cutting back on speculative bets, reflecting a bearish market sentiment and waning trader participation.
This outflow reflects forced liquidations and risk-averse sentiment, with institutions cutting positions in response to ongoing price pressures. Experts attribute the risk-off mood to various factors, including a weakening dollar, overseas conflicts, an unstable Japanese government bond market, and the transformative risks posed by artificial intelligence to traditional tech company models.
Last week’s U.S. employment report, which exceeded expectations, showed 130,000 new jobs added in January, dampening expectations for further rate cuts. Subsequently, large-scale institutional sell-offs became particularly evident.
Although some on-chain indicators have shown signs of easing, Bitcoin has struggled to hold above $70,000 over the past two weeks. Meanwhile, investor confidence in traditional stocks, especially tech stocks, has also declined. Analysts note that the lower U.S. inflation data in January sparked a wave of spot Bitcoin buying and forced short sellers to close positions in the perpetual futures market.
The consumer price index released on Friday showed a 2.4% year-over-year increase, down from 2.7% in December, easing concerns that persistent inflation would delay rate cuts.
Despite derivatives traders reducing their holdings, this move temporarily pushed Bitcoin prices above $70,000 over the past weekend. The decline in open interest and the shift to negative funding rates indicate that the recent rally was driven by short covering and spot demand rather than new leverage bets.
Despite market turmoil, historical patterns still offer resilience. Past halvings and ETF launches have signaled recoveries, with long-term holders like whales accumulating during downturns, a trend seen in previous cycles. ETF capital flows remain net positive throughout the year—BlackRock’s IBIT, despite recent outflows of $2.8 billion, still recorded inflows of $21 billion—indicating that institutions are holding through volatility rather than capitulating.
Analysts at Bitwise point to extreme fear but also note that Bitcoin’s open interest is stabilizing, suggesting that if leverage is cleared out, a bottom could be in sight and a rebound may occur.