TLDR
- Bitcoin futures open interest dropped by $10 billion in three weeks (Feb 20-March 4), seen as a “natural market reset”
- Bitcoin futures volume has rebounded 32% since late February to $57 billion
- Long/short ratio on Bitcoin derivatives is near neutral at 0.988, with some exchanges showing more bullish positions
- Ethereum and Solana futures volumes remain flat despite Bitcoin’s growing trader interest
- Stablecoin reserves across derivatives exchanges are increasing, even surpassing spot markets
In the ever-changing crypto landscape, Bitcoin futures markets have experienced significant shifts in recent weeks. After a substantial drop in open interest, Bitcoin futures volume is now rebounding, while Ethereum and Solana remain flat.
Bitcoin derivatives traders have become more cautious since BTC hit its all-time highs in mid-January. According to data from CryptoQuant, aggregate open interest on futures fell by $10 billion in just three weeks from February 20 through March 4.
This drop represents what some analysts call a “natural market reset.” On January 17, Bitcoin’s open interest reached an all-time high of over $33 billion, indicating record-high leverage in the market.
The 90-day change in Bitcoin futures open interest has dropped sharply and now sits at -14%. Looking at historical trends, past deleveraging events like this have often provided good opportunities for the short to medium term.
Despite this recent decline in open interest, Bitcoin futures volume has begun to rebound. Data shows that futures volume has increased by 32% since February 23 and now sits at $57 billion.
At the start of the year, the worth of futures trading activities in the Bitcoin market stood at $60 billion. Increased market participation saw the volume hit its current yearly peak of $63 billion in February.
Recent market uncertainties reduced traders’ appetite to speculate on Bitcoin’s short-term price actions. This caused a sharp fall to the early $40 billion range before the current rebound.
The volume remains below December’s peak of $74 billion. However, the upward trend suggests renewed interest in the asset among futures traders.
Binance accounts for over $18 billion of these volumes. Other major exchanges also hold large shares, with Bitget at $10.23 billion, OKX at $8.37 billion, and Bybit at $7.18 billion.
Ethereum & Solana’s trading volume remain flat
While Bitcoin futures volume grows, Ethereum and Solana tell a different story. Ethereum’s derivative volume opened the year at $32 billion and now stands at $28 billion, remaining almost unchanged recently.
This is nearly $10 billion below Ethereum’s peak volume of $37 billion last year. The flat volume comes as Ethereum’s price continues to struggle in the market.
Solana shows a similar pattern of trader disinterest. Its futures volume stands at $8.7 billion, down 29% from its year-to-date high of $12.2 billion.
The reduced interest in Solana derivatives comes amid several high-profile meme coin failures on its network. These events have created a pessimistic sentiment among traders.
The long/short ratio on Bitcoin derivatives currently stands at 0.988. This indicates a neutral to slightly bearish overall market sentiment.
However, individual exchanges show more bullish positions. Binance and OKX have ratios of 2.16 and 2.43 respectively, suggesting more positive bets on those platforms.
Stablecoin reserves across derivatives exchanges are increasing. They have even surpassed the reserves on spot markets according to CryptoQuant contributor Kriptolik.
Despite a rapid increase in total stablecoin supply since November 2024, this has not necessarily benefited the market significantly. Spot markets are described as suffering a “demand crisis.”
Some analysts suggest that until this distribution normalizes, avoiding high-leverage trades may be the most prudent approach. Bitcoin currently trades at $81,713, showing mixed signals for future price movement.
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