Binance BTC open interest drop may signal correction is near its end

Binance’s BTC open interest has fallen 17% to $8.8 billion from $10.6 billion in less than a month, slipping below its 180-day moving average, on-chain analyst Darkfost said. Darkfost said the decline signaled a reduction in leveraged positions across the market, a pattern that typically appears near the end of corrections during bull markets. Darkfost added that a similar signal appeared in June, after which BTC rebounded more than 45% from under $60,000 to above $87,000. The analyst said the recent drop in open interest has coincided with large-scale liquidations, with Binance’s monthly liquidation volume reaching more than $1.4 billion in August, $1.1 billion in September and $1.3 billion in October, the highest levels since 2021. November has already topped $520 million, Darkfost said. Reduced leverage may lower the risk of cascading liquidations and support a market recovery driven by spot demand, according to the analyst.