PANews reported on January 15th that, according to Cointelegraph, CryptoQuant data shows that open interest (IO) in the Bitcoin derivatives market has declined by approximately 30% since October of last year. Analysts point out that this "deleveraging signal" helps clear excess leverage accumulated in the market. Historically, similar sharp declines have often marked significant market bottoms, laying a more solid foundation for a potential bullish recovery. However, if Bitcoin prices continue to fall and fully enter a bear market, open interest could shrink further, implying deeper deleveraging and a prolonged correction period.

On October 6th last year, Bitcoin open interest reached an all-time high of over $15 billion. Currently, with prices rising alongside declining open interest, it typically indicates that leveraged short positions are being liquidated or closed out. This "short squeeze" could be beneficial for Bitcoin, as the price increase is driven more by spot buying than excessive leverage. However, derivatives provider Greeks Live points out that the derivatives market has not yet entered a structurally bullish phase; the current trading structure is more like a passive reaction to a sudden price surge.