Crypto-Native Traders Lead Bitcoin’s Massive Deleveraging, Leaving TradFi on the Sidelines

Crypto-Native Traders Drive Bitcoin’s Largest Deleveraging Event

Friday saw around $12 billion in Bitcoin futures liquidated, marking the largest nominal deleveraging in crypto history and signaling a potential market bottom.

Open interest (OI) — the total value of outstanding futures and perpetual contracts — fell sharply from $70 billion (560,000 BTC) to $58 billion (481,000 BTC). Adjusting for Bitcoin’s price drop from $122,000 to $107,000, the scale of the unwind is even clearer in BTC terms.

Glassnode data shows this was the largest single-day deleveraging in USD terms and the second-largest in BTC terms, behind only the March 2020 COVID crash. The CME, used mainly by institutional investors, saw little change, with OI around 145,000 BTC. Binance, however, experienced a steep decline from $16 billion (130,000 BTC) to $12 billion (105,000 BTC), highlighting that crypto-native traders, not traditional finance, drove the event.

Historically, such sharp reductions in open interest have often coincided with market bottoms, including the March 2020 COVID crash, China’s 2021 mining ban, and the FTX collapse in November 2022.