Bitcoin Futures Market Experiences Significant Reset, Open Interest Drops by 14%

The Bitcoin futures market has experienced a significant reset in recent weeks, with open interest dropping sharply while trading volumes begin to rebound.

Bitcoin futures saw a major reset in recent weeks as open interest dropped sharply while trading volumes began to recover. This shift in market dynamics comes after BTC reached all-time highs in mid-January.

Bitcoin futures saw $10 billion wiped off open interest in just three weeks, according to CryptoQuant. This portion of market depth fell from February 20 to March 4.

The portion of 90-day change in open interest fell by 14% to multiple lows not seen since November 2024. This portion of market breadth fell sharply after rising quickly during January’s market highs.

The period of rapid deleveraging follows Bitcoin futures open interest reaching a record high of over $33 billion on January 17. This peak coincided with Bitcoin’s price hitting its current all-time high, suggesting the market had become heavily leveraged.

Chart of Bitcoin futures volume on major exchanges. Credit: Glassnode

Bitcoin futures saw a 32% increase in recent weeks as trading activity picked up.

This portion of market liquidity rose from late February to mid-March, according to Glassnode data. At present, Bitcoin futures trading volume is $57 billion.

This marks a rebound from the lows seen in February, which followed December’s peak at $74 billion. Despite this recovery, current volumes remain relatively low.

Binance dominates the futures trading landscape with over $18 billion in volume. Other major exchanges like Bitget, OKX, and Bybit also hold large shares of the market with $10.23 billion, $8.37 billion, and $7.18 billion respectively.

The long/short ratio on Bitcoin derivatives is currently neutral to slightly bearish at 0.988 overall. Breaking this down by exchange reveals more bullish sentiment on platforms like Binance and OKX, which show ratios of 2.16 and 2.43 respectively.

This mixed sentiment suggests traders remain divided about Bitcoin’s short-term price direction. The current balance between bullish and bearish positions could lead to price volatility in either direction.

ETH and SOL Derivatives Market

While Bitcoin futures have seen increased activity, Ethereum and Solana derivatives markets tell a different story. Ethereum’s futures volume stands at $28 billion, remaining almost unchanged in recent weeks.

This flat performance for Ethereum derivatives comes despite similar downward price action across major cryptocurrencies. It suggests traders may be more hesitant about Ethereum’s near-term prospects compared to Bitcoin.

Solana has experienced even less futures market interest. Its futures volume currently sits at $8.7 billion, marking a 29% decrease from its year-to-date high of $12.2 billion.

The decline in Solana futures activity coincides with negative sentiment caused by several high-profile meme coin failures on the network. This has dampened trader enthusiasm for taking leveraged positions in the asset.

Stablecoin reserves across derivatives exchanges are increasing according to CryptoQuant. These reserves have even surpassed those on spot markets, suggesting more capital is being positioned for derivatives trading.

Despite this increase in stablecoin supply since November 2024, analysts note this has not translated into market benefits. One CryptoQuant contributor described spot markets as suffering a “demand crisis.”

Historical data suggests the recent deleveraging may create favorable conditions for Bitcoin. Past events with similar characteristics have provided “good opportunities for the short to medium term,” according to analysis from CryptoQuant.