Journalist
Posted:
Key Takeaways
Why Haven’t Bitcoin Futures Traders Capitulated?
Some over-indebted companies have done just that, as $840.4 million worth of BTC positions were liquidated over the past seven days. Still, overall, speculative interest witnessed continued long-term growth.
Are there any signs of capitulation in the short term?
Yes, the estimated leverage ratio has fallen over the past three days. Spot markets saw steady selling and short-term holders faced significant losses.
Bitcoin has faced high selling pressure over the past month, and its loss of the $100,000 level sparked debate over whether the cycle top had already been reached. Experts warned traders to prepare for a bear market.
The rampant fear in the market wasn’t enough to seriously disrupt futures trading volume. Yes, the open interest behind Bitcoin [BTC] has fallen dramatically since the first week of October.
At the time, OI was $94.12 billion. Just six weeks later, OI was $67.21 billion.
This represented a 28.6% decline in OI. Still, it was at the same level as in November-December 2024.
In late December, Bitcoin made its first attempt past the $100,000 mark, an extremely important psychological round number.
Although it has lost the same level after seven months of trading above, the Futures market has been chugging along nicely. The wild volatility and a possible macro trend shift were not enough to dampen the mood among speculators for good.
Sticks and stones won’t break our bones, and neither will $19 billion in destruction
Crypto is gaining legitimacy in the public eye. Exchange traded funds are available and publicly traded companies are hoarding Bitcoin and Ethereum [ETH]and other assets are a huge shift from 2018.
At the time Bitcoin was called “a bubble, a Ponzi scheme and an environmental disaster.”
The regulators’ crackdown exacerbated market panic in a nascent industry whose participants could be forgiven for wondering whether crypto could last another year.
The historic price crash on 10/10, which disproportionately hurt altcoins, saw $19 billion in liquidations in one day.
The estimated leverage ratio, which is a measure of the average amount of leverage used by traders, fell to a March-April 2025 low by the end of October.
Another decline occurred on Tuesday, November 18, and at the time of writing it was also declining.
This measure can help figure out when the market is overloaded and in need of a correction, and can also be a signal that speculators are capitulating.
But as the relatively high OI (compared to Q4 2024) showed, capitulation does not mean the futures market becomes a ghost town.
The growing popularity of decentralized exchanges such as Hyperliquid [HYPE] proves this. Bitcoin is here to stay, and so is futures market leverage, for better or worse.