Bitcoin (BTC) open interest (OI) has dropped to its lowest since August, now sitting at 413,000 BTC (valued at $36 billion), according to data from Glassnode. OI reflects the total funds committed in open futures contracts, serving as a gauge for leverage in the Bitcoin market.

As these contracts are priced in dollars, their value fluctuates with Bitcoin’s price. To ensure a more stable measure, we evaluate open interest in Bitcoin terms to exclude price-induced distortions.

Key Insights:

• Open interest in Bitcoin across all platforms has decreased from 546,000 BTC to 413,000 BTC since August.
• The open interest on Binance, the second-largest exchange by OI, has dipped to its lowest in a year, with just above 100,000 BTC in contracts, signaling a significant reduction in leverage from a retail viewpoint.
• The downturn is indicative of lowered speculative activities, influenced by Bitcoin’s high price volatility seen in recent months.

Additionally, open interest as a fraction of Bitcoin’s market cap has now fallen below 2%, a first since February 2024, emphasizing the dramatic decrease in speculation and leveraged trading.