Bitcoin Futures Open Interest Drops Nearly 20% as June Selloff Clears Leverage
Summary
- According to CryptoQuant, Bitcoin saw a broad unwind of leverage in the futures market during a double-digit correction in June.
- Bitcoin open interest across all exchanges fell 19.5%% to $20.89 billion on June 21 from $25.96 billion on June 1, according to the data.
- The contributor added that the latest correction amounted to a futures leverage reset and suggested the market had shifted to a much healthier structure than one marked by excessive leverage.
Forecast Trend Report by Period
Bitcoin’s double-digit pullback in June was accompanied by a broad unwind of leverage in the futures market.
On June 23, CryptoQuant contributor Woo Min-kyu wrote that Bitcoin’s latest correction looked less like fresh leverage building and more like a reset in futures leverage.
CryptoQuant data showed Bitcoin open interest across all exchanges fell 19.5% to $20.89 billion on June 21 from $25.96 billion on June 1. Over the same period, Bitcoin’s price fell about 11.4%.
Open interest refers to futures contracts that have not been closed out. When both price and open interest decline at the same time, it usually signals that existing leveraged positions are being liquidated or reduced.
Open interest fell more sharply than Bitcoin’s price during the downturn, indicating a meaningful leverage reset in the futures market, Woo wrote.
While that is not a guarantee of an immediate rebound, it suggests the market structure has improved and is healthier than when excessive leverage was concentrated in the market.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.
