After months of aggressive positioning, Bitcoin’s market structure is increasingly defined by caution rather than confidence. As macroeconomic and geopolitical risks resurface, traders are taking a step back.
Bitcoin traders have adopted a deleveraging strategy in volatile markets.
Investors are refraining from taking risky leveraged positions in Bitcoin futures, according to CryptoQuant analyst Darkfrost. This behavioral change is most evident on Binance. It currently dominates global BTC futures activity, accounting for over 31% of total Bitcoin open interest (excluding the Chicago Mercantile Exchange).
The platform’s expected leverage ratio for BTC steadily decreased throughout February, dropping from 0.19 to 0.15. At the same time, approximately 30,000 BTC worth of open interest disappeared from the exchange. Darkfost explains that these developments are not random fluctuations, but reflect traders deliberately closing positions and reducing exposure.
Bitcoin holdings on exchanges remain relatively stable. This means investors are in no rush to withdraw their funds. They are simply de-leveraging. This distinction is important and suggests strategic risk management rather than panic-driven capitulation.
Increasing macroscopic instability in the Bitcoin market
Analyst Darkfost noted that several macroeconomic and geopolitical pressures have contributed to a risk-averse environment, which is weighing on cryptocurrency markets with no signs of improvement. He noted that President Donald Trump announced a new 10% tariff after the Supreme Court ruled on previous tariffs.
At the same time, statements surrounding the possibility of a limited attack on Iran are further adding to geopolitical tensions. On the economic front, the U.S. economic growth rate in the fourth quarter was lower than expected at 1.4%, further increasing concerns about a slowdown in momentum. Meanwhile, core PCE inflation rose unexpectedly to 3%.
In this environment, leveraged risk-taking becomes much less attractive. Traders recognize that volatility caused by macro headlines can quickly lead to liquidation of overextended positions.
Reduced leverage often creates short-term price pressure as closing futures contracts can encourage selling activity. However, excessive leverage makes markets vulnerable. By eliminating overextended positions, the market reduces systemic risk and undergoes a constructive structural reset. At this point, Bitcoin becomes less vulnerable to violent liquidation events and has a greater ability to maintain organic price discovery.
At the time of writing, Bitcoin is trading at $67,965 and has seen a slight increase of around 2.45% over the past seven days. Meanwhile, daily trading volume increased 36.98%, reaching $44.98 billion.
Featured image from Flickr, chart from Tradingview
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