Bitcoin ($BTC) is displaying strong organic momentum rallying over 35% from its August low despite a notable nearly 20% decline in coin-denominated open interest
This divergence has pushed open interest to its lowest point since March signaling that the current upward trajectory is primarily spot-driven rather than fueled by speculative derivatives trading. As leverage exits the system the market becomes significantly less vulnerable to sudden cascade liquidations and leverage flushes,l creating a much healthier market structure
This deleveraging trend indicates that institutional and retail spot buyers are accumulating $BTC directly reducing systemic risk in perpetual contracts. Will spot demand be strong enough to sustain this rally through the upcoming market cycle without heavy derivatives backing
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Source: On-chain & Derivatives Market Data