Analyst: The contract market has shown "deleveraging signals" over the past 3 months, resetting the market structure and possibly indicating a stage bottom formation

BlockBeats News, January 15, cryptocurrency data platform CryptoQuant stated that the open interest in the bitcoin derivatives market has continued to decline over the past three months, and the market leverage level has gradually decreased, creating conditions for the overall market structure to turn bullish.

Since October last year, open interest (OI) in bitcoin derivatives has dropped by 31%, which is considered a "deleveraging signal" that helps eliminate excessive leverage accumulated in the market. The platform cited the view of crypto analyst "Darkfost": "Historical data shows that such deleveraging phases often mark the formation of significant bottoms, effectively resetting the market structure and laying a more solid foundation for a potential bull market recovery."

The analyst believes that this pattern may be repeating now, but also added that if bitcoin continues to decline and fully enters a bear market, "open interest may shrink further, indicating a deeper deleveraging adjustment and a continuation of the correction trend."