Bitcoin Open Interest Falls to One-Month Low Despite 22% Surge

Forecast Trend Report by Period

Bitcoin (BTC) has surged about 22% recently, but leverage in the market has declined instead, suggesting the rally differs from sharp advances driven by expanding leveraged bets.

On Aug. 24, on-chain analytics firm Santiment wrote on X, formerly Twitter, that Bitcoin rose from an average of about $63,500 between Aug. 12 and Aug. 18 to $77,700 on Aug. 23.

Open interest measured in Bitcoin fell about 11% over the same period, dropping from roughly 353,500 BTC to 312,600 BTC, the lowest level in the past month. Open interest refers to futures contracts that remain outstanding.

In dollar terms, open interest rose about 8% during the same period because Bitcoin's price gain outpaced the decline in BTC-denominated open interest. Santiment said dollar-denominated figures alone can make it appear that leverage increased, but Bitcoin-based data show the actual size of positions shrank.

That runs counter to the view that the rally was an overheated surge fueled by rising leverage, Santiment said. Positions were liquidated as prices climbed, and the advance then continued with less leverage. Bitcoin reached a fresh high, but leverage did not follow, it added.