Bitcoin prices plummeted to $88,500 on February 25th, causing a $1.48 billion liquidation across the futures market. This important amendment, which saw Bitcoin fall far below the realised price of short-term holders, was partly driven by macro uncertainty following Trump’s proposed tariffs.
The initial response to tariffs sent Bitcoin to $91,000, but altcoins saw an even more sharp decline. The futures market felt that it was bearing the brunt of this volatility, as evident by the sharp decline in interest opened across the exchange. Open interest representing the total number of open futures contracts is a key indicator of market leverage and activity.
Across all exchanges, oi fluctuated significantly. It reached $57.63 billion at 01:00 on February 24th, and by February 25th it rose to $579.5 billion at 01:00, then fell to $557.1 billion by 11:41. . This $2.24 billion decline reflects a rapid decline in market leverage as traders closed their positions or were liquidated in large quantities.
The impacts vary widely with exchanges. CME, which primarily serves institutional investors, recorded a 24-hour decline of 8.38%, reducing its OI to $14.87 billion. This decline suggests that institutional traders who normally hold larger, leveraged positions responded quickly to price declines by reducing closures or exposure.
Exchange OI Change OI 24H OI/24H_VOL CME $14.85B -8.24%1.3552 BINANCE $11.13B -1.49%0.2692 COINBASE $105.23M -41.10%0.004
In contrast, Binance, the exchange for yesterday’s best single liquidation, saw a much smaller OI of -0.22% decrease over the same period, bringing the OI to $112.9 billion. Despite absorbing large liquidation, Binance’s resilience in OI points to a large retail user base that traders may be willing to maintain or open new positions in volatility. It’s there.
Coinbase experienced the most dramatic percentage drop in OI at -41.10%, reducing OI’s OI to just $117 million. Coinbase holds a small market share of futures, but this sharp decline occurs when its users (retailers and institutional traders with low risk tolerance) are likely to be able to sell or forcefully settle the market. It shows that he responded strongly to stress.
The importance of a 41% decline in Coinbase’s OI lies in what makes it clear about retail sentiment. Despite a modest $110 million issued contract and a market share of just 0.19%, the magnitude of the decline is that Coinbase’s futures market is either highly utilized or under intense sales pressure. It suggests that.
The platform’s extremely low OI to 24-hour volume ratio of 0.0042 is the lowest of the major exchanges – showing minimal trading activity compared to OI, which is likely to exacerbate the impact of liquidation indicates. This behavior suggests a loss of trust among retailers regarding exchange. This is usually a segment that stabilizes the market during revisions.
The gap between CME and Binance further highlights structural differences in the futures market. The -8.38% OI drop in CME reflects the careful nature of institutional traders despite the lower liquidation volume compared to Binance. These players likely closed their positions to mitigate risk, as evidenced by the high OI of CME and a 24-hour volume ratio of 1.3552, showing robust trading activity compared to OI. .
In contrast, Binance’s -0.22% OI reduction, coupled with OI and a low ratio of 0.3004 for 24 hours, has resulted in many overly layered retail positions being liquidated, but others remain or exchanged. suggests that the overall decrease in OI was eased. .
Binance’s resilience shows that retained retail interest is visible. However, a larger proportional decline in CME could slow potential recovery as large players continue to be pulled back.
Post Futures Market will flow $22.4 billion in OI after its first appearance in Cryptoslate after Bitcoin has dropped to 88k.
