BTC Open Interest Drops From $45B to $28B and Sparks Talk of a Flush

BTC open interest dropped from $45B to $28B, which marked the largest fall of this cycle based on the chart.

The chart showed three large open interest collapses in the past, with each linked to heavy leverage unwinds.

CryptoQuant said the latest drop likely marked a leverage flush rather than the start of a major bear phase.

BTC recorded its sharpest open interest decline of this cycle as levels fell from $45B to $28B within days, while the chart linked the move to a large leverage flush rather than the start of a full bear phase. The fall created strong attention across the market because such drops have marked key reset points in earlier cycles. This raised one central question among traders today: Will this open interest crash spark renewed stability or extend the current turbulence?

Chart Shows the Largest Open Interest Fall of the Cycle

The chart displayed a steep drop in the blue open interest line, which moved from $45B down to $28B in a rapid swing. The fall marked the biggest open interest decline seen in the entire cycle based on the data. The white price line moved lower during the same period, but did not show a collapse equal to the open interest drop.

The image also highlighted earlier large open interest reset points with yellow boxes marking similar events. Those events occurred at different stages of the chart, and each followed a strong period of heavy liquidation. The fall in the latest move matched the size of the earlier flush seen during the midsection of the chart.

The relationship between price and open interest remained clear because open interest dropped faster than price, which often signals that long positions were removed quickly. This structure matched the pattern of a leverage flush rather than a structural shift in the trend.

Previous Open Interest Flushes Support the Current Interpretation

Two earlier drops appeared on the chart with highlighted boxes around the sharp downward movements in the blue line. Those earlier events showed rapid liquidation phases where open interest fell while price held or declined at a slower rate. The current drop matched the same shape and size, which placed it in line with a leverage reset pattern.

The centre section of the chart showed one such drop in 2024, where a strong open interest fall occurred before the price resumed higher levels. The far right section showed another earlier one in 2025, which aligned with a short correction period that later stabilized. These past examples formed the basis for the interpretation that the current move did not signal a deep bear phase.

The latest chart also showed the open interest value stabilizing near $28B after the drop, which suggested that the bulk of the forced liquidation action was already complete. That stabilization created a base for the next phase as traders watched the price near $86.9K.

CryptoQuant States the Drop Marks a Flush Event Not a Bear Trend

The text beside the chart said that, according to CryptoQuant, the event pointed to a major leverage flush and not a full bear market. This matched the structure seen in the image because the open interest drop did not align with a total breakdown in price.

Price held above $80K even as the blue line fell sharply, which suggested that the move was driven mainly by derivatives liquidation. The chart captured this behaviour with the white line tracking a steady decline rather than a collapse. This type of divergence often signals that the market absorbed the event without more serious structural damage.

The left section of the image also showed strong growth in price and open interest earlier in the cycle, which supported the view that the trend remained intact despite the reset. The latest move, therefore, aligned with typical behaviour seen during major leverage washout phases.