Bitcoin’s fall to $61,000 over the past week has flushed out its fair share of leverage.Look no further than Bitcoin’s futures market, where the total value of futures contracts traded on major exchanges has plummeted by $5.2 billion during that span, according to “This absolutely is a deleveraging event,” Amberdata’s Director of Derivatives Greg Magadini told After setting a new all-time high of $73,000 last month, Bitcoin has since fallen 16% to its lowest price since February. Open interest for Bitcoin futures swelled as high as $36 billion in March as traders placed bets that the cryptocurrency’s price would mostly rise. “Fundamentals for Bitcoin have never been stronger,” Magadini said.Futures contracts—an agreement to buy or sell an asset at a specific price at a later date—allow traders to speculate on movements in an asset’s price. And based on the difference between payments in futures contract markets and Bitcoin’s spot price, Magadini said that “leveraged long positioning was kind of at extremes last week.”This weekend was a proper deleveraging.Notional OI in BTC perps has declined by 11% to yearly lows.The shakeout in altcoins was even wilder. By using Tradingview’s TOTAL2 index as a notional proxy, relative altcoin OI has plunged to lows not seen since Feb 2023! pic.twitter.com/c5TqXeNSRE— Vetle Lunde (@VetleLunde) April 17, 2024As the cost of holding a leveraged long position in the Bitcoin futures market ballooned, funding costs for Bitcoin futures rose to 25% on an annualized basis, Magadini said. Following a turbulent week in markets, however, funding costs for Bitcoin futures have fallen to 8%.Meanwhile, $90 million worth of Bitcoin liquidations had taken place over the past day, according to “Everyone was already leaning the same way, so it doesn’t matter if the fundamentals are great,” Magadini said. “If the marginal buyer is no longer around, and everyone’s got the same position on, the second any sort of selling happens, we get sort of this cascading effect.”Before the liquidations occurred, Magadini feared that Bitcoin’s halving—“Everyone’s already long, so people had to sell, but we got the clearing before for different reasons,” Magadini said. “Instead of ‘sell the news,’ we’ve got sort of this macro event to cause the cascade.”
