Analysis: Bitcoin Derivatives Market Ends 8-Month Deleveraging Cycle, Binance's Open Interest Returns Above the 180-Day Moving Average

BlockBeats News, May 22nd, According to analyst Darkfost (@Darkfost_Coc) who posted on social media, since the events of October 10th last year, Bitcoin has been through a prolonged deleveraging phase in the derivatives market. When the open interest fell below the 180-day moving average, it usually signaled a reduction in futures activity, as investors' derisking behavior led to a decrease in open interest. Influenced by the deteriorating global macroeconomics and geopolitical background, traders generally chose to reduce their risk exposure. This deleveraging phase on Binance lasted for about 8 months, with the last similar occurrence dating back to the previous bear market in 2022, just before the FTX collapse.

However, since early May, the trend seems to be changing. The open interest on Binance has risen from around $6.4 billion in March to the current approximately $8.96 billion, reclaiming the 180-day moving average of around $8.75 billion. This actually marks the end of the deleveraging cycle. Investors returning to the derivatives market have clearly driven the current upward rebound, but it is still too early to call it a true recovery.

Despite the ongoing deterioration of the macro environment, Bitcoin's significant pullback has attracted more speculative traders seeking a rebound opportunity. It should be noted that this trend remains highly fragile, and once Bitcoin resumes the correction trend that began in October last year, these traders may quickly exit as fast as they entered.