$BTC lost more than $3,000 over the past week, but futures OI is still rising — leverage hasn’t been flushed out
Prices are falling, but the number of open leveraged positions isn’t — it’s actually growing. That’s a sign that most of the old long positions still haven’t been forced out of the market, and the risk of a cascade of liquidations remains.
Three figures I pulled directly from Binance futures data this morning. $BTC fell from a peak of around $84,350 to below $81,000 in less than a week, losing more than 4%.
At the same time, BTC’s open interest (OI) didn’t contract along with the price. It rose from around 92,500 BTC to over 94,000 BTC, an increase of nearly 2%.
The account long/short ratio is now tilted heavily toward longs, at around 64% long versus 36% short. The funding rate is nearly zero and slightly negative—far below the strongly positive levels often seen when the market is euphorically chasing prices.
OI measures the total number of open contracts, not the trading volume executed during the day. It only falls when positions are actually closed, whether through taking profits, manually cutting losses, or forced liquidations by the exchange.
A healthy trend usually has price and OI moving in the same direction: rising prices alongside rising OI mean new money is pushing prices up, while falling prices alongside falling OI mean losing positions are being cleared out. When the two diverge, it’s time to take a closer look.
If the price falls while OI holds steady or increases, it means most long-position holders aren’t closing their trades. They may believe the price will recover, or their liquidation levels may still be far from the current price.
The opposite scenario is also possible, and I’m not ruling it out. Rising OI could be due to traders opening positions on both sides in roughly equal numbers—for example, buying spot and shorting futures to capture the spread. That doesn’t necessarily mean stubborn longs are holding onto losing positions.
It’s also possible that some leverage was wiped out in a brief period, only for new money to open positions again almost immediately. Daily OI figures won’t show a liquidation that happened in between.
The level I’ll be watching next is the $80,136 support area, which has been tested four times recently on the 4-hour chart. If the price breaks below it and OI drops sharply over a few hours, that’s when we’ll know some longs have actually been liquidated—not just speculate about it.
Conversely, if the price rebounds to the $82,123 resistance area while OI stays flat or keeps rising, it means there are even more vulnerable long positions hanging in the balance. Risk is building up rather than clearing out, and the next drop, if it comes, will be stronger than this one.
Many people look only at the price chart to guess what comes next. OI tells us how much actual leverage is trapped behind that candle—something the price chart alone can’t reveal.
Do you keep an eye on OI before entering a trade, or do you only watch the price chart?
Personal observation, not investment advice
#TheoDõiFOMC #TinFed #BTC