As the markets headed into the weekend, Bitcoin [BTC] approved $13.45 billion in contracts, lifting short-term positioning and easing gamma restrictions. As this overhang faded, the price fell towards $65,500, reflecting risk aversion driven by geopolitical tensions and extreme fear.
As pressure increased, Open Interest fell by 42%, from approximately 550,000 to 320,000 contracts afterwards.
This sharp contraction confirmed the broad deleveraging across the board. Mainly because traders closed their positions, rather than causing consecutive liquidations.
When leverage was reset, pressure on derivatives fell to lower percentiles, further reinforcing the flush of speculative surplus from the system. The price then stabilized around $66,300, where buyers began to absorb supply within a cleaner, less crowded structure.
This stabilization is evidence of equilibrium and not strength, as demand has thus far been cautious under macroeconomic stress. With positioning reset, Bitcoin now enters a transition phase where new flows will likely determine the next expansion in volatility or change in direction.
Will low leverage suppress or unleash volatility?
Bitcoin’s derivative structure reset after its March 27 expiration, leaving Futures Open Interest (OI) at almost $108.4 billion after a decline of 0.58%. As leverage thinned, the overcrowded positioning was relaxed, removing gamma constraints that had firmly pinned short-term price action.
As OI decreased, liquidation risk decreased. This typically suppresses realized volatility in the immediate post-expiration phase. This happens because there are fewer leverage positions left that can cause forced moves, allowing the price to stabilize within a calmer range.
With strikes clustered around $66,000-$67,000 and leverage rebuilding still weak, Bitcoin is now at a pivot where muted volatility may persist. And yet, any new positioning or macro trigger can quickly fuel expansion.
Bitcoin in extreme fear as the market waits for a shift in demand
Bitcoin’s post-expiration reset is now shifting into a sentiment phase characterized by continued stress rather than recovery. At the time of writing, the Fear and Greed Index held between 11 and 12 for a third session – A sign of downward expectations.
Thanks to this caution, BTC Futures Open Interest fell another 3.33% to $50.06 billion – continuing the deleveraging trend. Such a sustained reduction lowers liquidation risk, but also removes structural buffers that once mitigated volatility.
Funding was slightly negative, while long/short ratios hovered around parity, reinforcing weak conviction among participants. As geopolitical tension increases, this vulnerable positioning will make the price increasingly sensitive to headline-driven moves.
Extreme fear alone cannot confirm a bottom without demand. If spot absorption does not materialize, Bitcoin will remain exposed to renewed volatility expansion.
All things considered, it can be said that Bitcoin has reset its structure. However, conviction remains weak around $66,000. As spot absorption becomes stronger, recovery can stabilize. On the contrary, rebuilding debt first will likely increase volatility, especially under macroeconomic pressures.
Final summary
- Bitcoin [BTC] released a $13.45 billion expiration as Open Interest fell 42%, reducing liquidation risk but keeping the price near $66,000 on weak demand.
- Bitcoin now relies on spot absorption for stability, while rebuilding leverage risks renewed volatility under macro pressures.