Analyzing open interest in derivatives markets is a significant sentiment indicator for participants. We explore recent changes and their impact on the Bitcoin market.
Open Interest and Market Reactions
Since January 2025, the open interest (OI) metric has proven useful in identifying moments when market participants were caught off guard by Bitcoin’s movements. During the drop below $80k, OI contracted by more than 10% per week, indicating that over-leveraged long positions were being liquidated as prices neared liquidation levels.
Futures Market Adjustments and Short Squeeze
As short positions were flushed out, futures open interest declined by 10%, dropping from 370k BTC to 336k BTC. This reduction gives insight into the scale of the short squeeze and reduces the likelihood of a sudden deleveraging event, which would otherwise contribute to higher volatility in the near term.
Options Market: Growing Bullish Sentiment
Further insight into market sentiment can be found in options market data, specifically the 25 Delta Skew. This metric measures the difference in implied volatility between puts and calls. Currently, the 25 Delta Skew (1M) is at -6.1%, meaning call options are more expensive than put options, reflecting growing bullish speculation.
The overall analysis of open interest, futures, and options shows changing sentiments in the Bitcoin market. This data can serve as a basis for further price movement forecasts.
