Bitcoin Leverage Reset Deepens as Traders Pull Back After $9B Open Interest Drop

TLDR:

Bitcoin open interest dropped over $9B since October 10, signaling a leverage reset.
Traders remain cautious, avoiding new leveraged positions on major exchanges.
Allegations of Binance triggering forced ADL liquidations have surfaced online.
Bitcoin stabilizes near $100K as reduced leverage limits volatility.

Bitcoin’s derivatives market just went through one of its sharpest resets in years. 

Open interest across major exchanges has plunged more than at any point this cycle, according to data shared by analyst CryptosRus. Since the October 10 liquidation event, Binance has seen a $4 billion decline, Bybit is down $3 billion, and Gate has dropped over $2 billion. 

The decline shows traders aren’t rushing back to use leverage. Market volatility has cooled, leaving Bitcoin trading in tight ranges near the $100,000 level.

Leverage Wipeout Leaves Bitcoin Market in Reset Mode

The market’s slow rebound reflects a lingering lack of conviction. 

Historically, leverage tends to rebuild quickly after liquidation events. This time, however, traders appear to be waiting on the sidelines. The absence of new leveraged positions has reduced short-term volatility, leading to slower and more controlled price movements.

Analysts say this dynamic signals a healthier phase for Bitcoin. With fewer aggressive positions, sudden cascades become less likely. That creates a more stable base for future rallies. Yet, it also limits near-term upside momentum, leaving price action choppy and less directional.

On social platforms, some traders claim deeper forces were at play. User Mr. Wall Street alleged that the October 10 crash was not triggered by U.S. policy headlines but by coordinated selling from Binance. 

According to his post, the exchange sold large spot holdings around $121,000 to $116,000 before activating its Auto Deleveraging (ADL) system, which forced liquidations across leveraged accounts.

Claims of Exchange Manipulation Stir Controversy

These allegations, while unverified, have fueled heated debate across the crypto community. 

The theory suggests Binance’s ADL system impacted not only retail traders but also market makers who rely on perpetual hedging to manage risk. When those hedges were forcibly closed, market makers allegedly faced heavy losses, leaving them exposed to a rapid downward spiral.

As some of these firms liquidate remaining spot holdings to cover losses, pressure on BTC’s price has continued. However, analysts note that the lack of leverage now in the system reduces the risk of another deep selloff. 

Once liquidity stabilizes, the same dynamic could pave the way for a stronger recovery phase.

Despite the drama, Bitcoin’s key support near $100,000 has held firm for now. If the market maintains that level, traders expect a test of the $118,000–$120,000 zone, which could decide the next major trend.