A review of the changes in Bitcoin derivatives market indicators post the recent cryptocurrency crash.

Decline in Bitcoin Open Interest and Estimated Leverage Ratio

An overview on the recent metrics related to the derivatives market with a focus on the Open Interest and Estimated Leverage Ratio.

The Open Interest (OI) signifies the total number of current positions in Bitcoin across all derivatives exchanges, covering both long and short positions.

A surge in this metric indicates a rise in investor interest and speculation in the market, while a decrease suggests either voluntary position closures or forced liquidations.

Chart displaying the trend in Bitcoin OI over recent years illustrates a significant drop following the cryptocurrency price crash due to high liquidations.

The OI value stood at $16.7 billion before the plunge, now dropping to $14.2 billion, bringing it back to pre-all-time high levels.

Another key indicator is the Estimated Leverage Ratio (ELR), reflecting the ratio between Bitcoin OI and the total BTC on derivatives exchanges to gauge leverage appetite.

Visual representation shows a decline in ELR from 0.199 to 0.176 post the crash.

Decreases in OI and ELR are favorable for market stability, historically, highly leveraged derivatives sectors have caused chaos in the cryptocurrency market.

According to the analysis, the market seems adequately deleveraged after the crash, potentially indicating a more stable environment and a groundwork for recovery, if other market conditions remain positive.

Bitcoin Price

Bitcoin is currently trading around $56,100, showing a more than 9% increase in the last 24 hours.