Bitcoin [BTC] has faced intense selling pressure over the past week. On Wednesday, January 28, Bitcoin bounced to a local high of $90.6k. Since this high, the stock has fallen 16.8% in less than five days.
Source: MintGlass
CoinGlass data showed a downward trend in speculative interest since September 2025.
The declining Open Interest led to a revival of positive sentiment at the beginning of this year, but continued the previous downward trend after mid-January.
This reflected the increasing malaise in the Bitcoin market. Speculators were less willing to bid and became less and less convinced of a recovery.
Combined with the heavy liquidation volume since October, this showed that leverage traders looking for a higher recovery were being punished.
The current move was the confirmation of a bear market or a relentless liquidity chase that is almost at the maximum pain level.
Bitcoin bulls were quickly punished
The Estimated Leverage Ratio (ELR) is the exchange’s open interest for a currency divided by the currency’s reserve. This gives an idea of whether users are using more leverage on average.
From January 26 to 29, the ELR increased from 0.220 to 0.242. At that time, BTC was trading at $86k, briefly rose to $88k, then dropped to $84.6k on the 29th.
The noticeable increase in ELR indicated greater leverage in the market as BTC tested a significant support level, dating back to November 22, 2025.
It should be noted that foreign exchange reserves increased during this time, making the OI peak even more transparent.
Crypto analyst Axel Adler Jr. noted that market conditions reflected “extreme deleveraging.”
Over the past week, the OI has fallen at or faster than the price, falling significantly below the 90-day norm by the end of the week.
Open Interest Momentum Index values fell to moderate and extreme deleveraging values. The analyst noted that this is typical of “forced compression with leverage and position closure.”
It was not a complete washout of derivatives as the funding rate remained positive. That’s why one technical price increase is possible, but sustainable recovery requires OI to stabilize.
Final thoughts
- Open Interest and market leverage have fallen sharply over the past week.
- It represented an extreme deleveraging, but analysts noted that a technical rise is still possible.