The Open Interest Delta measures changes in the number of outstanding derivatives contracts over a set period, providing insights into market sentiment and trading activity.
Increasing deltas typically signal rising speculative interest, while decreasing deltas indicate position unwinding or reduced market participation.
Recently, the 180-day Open Interest Delta chart has shown a notable decline in derivatives activity, particularly on platforms like Binance and CME.
This reduction in Open Interest aligns with past instances of market exhaustion, such as in late 2021 and mid-2023, and suggests that institutions may be closing positions to secure profits.
Similarly, the 90-day Open Interest Delta chart revealed a trend of declining open interest too, indicating profit-taking and reduced speculative participation.
These shifts in market behavior, particularly among institutional players, often precede price corrections.
The aggregated delta across exchanges has moved into negative territory, proving reduced liquidity and heightened volatility.
With both retail and institutional traders potentially stepping back, Bitcoin could face significant downside risks if this trend continues.
