Bitcoin’s derivatives market has reached a critical inflection point, as Open Interest dropped to its lowest level of 2025, according to new data shared by CryptoQuant and highlighted by Cointelegraph.
The metric, which tracks the total number of outstanding futures and perpetual contracts, is now approaching the Extreme Fear zone, a region historically associated with market bottoms and selling exhaustion. Analysts suggest this capitulation phase may indicate that speculative leverage has been flushed out, setting up conditions for a potential rebound.
As shown on the chart, previous periods of extremely low Open Interest in 2023 and 2024 were followed by sharp recoveries in Bitcoin’s price, often marking the end of major liquidation cycles. The analyst behind the report noted that while fear remains high across derivatives markets, Bitcoin’s long-term uptrend remains intact, supported by gradual accumulation from institutional wallets and ETF inflows.
This extreme sentiment shift aligns with the Fear & Greed Index, which recently hit 28, signaling widespread caution among traders. Historically, such levels have preceded renewed bullish momentum once leverage stabilizes and new capital begins re-entering the market.
If the pattern holds, the current washout could mirror earlier consolidation phases that ultimately fueled Bitcoin’s next major leg upward.