Bitcoin Leverage Cooldown Signals Market Reset: OI Drops 21% As Excess Risk Is Flushed Out

Bitcoin continues to consolidate beneath the $105,000 mark, sustaining stability above the important thing $100,000 assist degree regardless of ongoing market uncertainty. Bulls look like shedding momentum, but sellers are displaying indicators of exhaustion as the worth resists additional decline. According to high analyst Darkfost, the market has entered a transparent deleveraging section following the main liquidation occasion on October 10 — a structural reset that’s eradicating extreme leverage from the system.

Data reveals that open curiosity — the overall worth of lively futures contracts — has fallen by 21% over the previous 90 days, marking one of many steepest declines of the cycle. This drop displays merchants decreasing threat publicity and liquidations steadily clearing overleveraged positions.

Darkfost notes that leverage utilization is progressively cooling down, with the present drawdown echoing earlier cleaning phases seen in September 2024 and April 2025. Historically, such durations of pressured unwinding have preceded new market power as liquidity stabilizes and speculative extra fades.

Deleveraging Signals a Potential Turning Point for Bitcoin

Darkfost explains that the present deleveraging section bears hanging similarities to earlier corrective durations that in the end paved the way in which for main recoveries. During the September 2024 and April 2025 corrections, open interest fell by roughly 24% and 29%, respectively — deep sufficient to flush out extreme hypothesis and restore stability throughout the market.

With the present 21% decline in open curiosity over the past three months, Bitcoin is now approaching those self same historic ranges of leverage discount. According to Darkfost, these phases will not be essentially bearish; as an alternative, they function wholesome resets throughout bullish market cycles. By forcing overleveraged merchants to exit and cooling down speculative habits, the market is ready to rebuild on a stronger, extra steady basis.

In previous cycles, such unwinding occasions have been usually adopted by pattern reversals as soon as promoting strain eased and new demand emerged. The discount in leverage additionally tends to draw long-term buyers and establishments in search of lower-risk entry factors.

If Bitcoin continues to carry its floor above $100K by means of this era of structural cleanup, it might sign that the worst of the correction is over, setting the stage for a possible new impulse section as soon as confidence returns.

BTC Tests Support As Consolidation Continues Above $100K

The weekly Bitcoin chart reveals that BTC stays in a decent consolidation vary between $100,000 and $105,000, testing key structural assist. The worth has repeatedly defended the 100-day shifting common (blue line), indicating that regardless of sustained promoting strain, consumers proceed to step in round this psychological zone.

The general pattern stays bullish on increased timeframes, with the 200-week shifting common (purple line) trending upward and effectively beneath present worth motion — a sign that Bitcoin’s long-term market construction stays intact. However, momentum indicators replicate weak point, as BTC struggles to reclaim the $110,000 resistance degree that capped earlier rebound makes an attempt.

Trading quantity has decreased because the October liquidation occasion, aligning with Darkfost’s remark that the market is present process a deleveraging section. This decrease quantity setting suggests investor hesitation but in addition signifies that pressured promoting could also be nearing exhaustion.

A decisive weekly shut above $106,000 might affirm renewed bullish momentum, whereas a breakdown beneath $100,000 may set off deeper corrections towards $92,000 — the following main assist zone.

Featured picture from ChatGPT, chart from TradingView.com