After months of aggressive positioning, Bitcoin’s market structure is being defined with caution rather than conviction. Traders are retreating as macroeconomic and geopolitical risks re-emerge.
Bitcoin traders adopt deleveraging strategy in volatile market
According to CryptoQuant analyst, DarkFrost, investors are avoiding risky leveraged positions in Bitcoin futures. This behavioral change is most evident on Binance. Which currently dominates global BTC futures activity, accounting for over 31% of total Bitcoin open interest (excludes CME – Chicago Mercantile Exchange).
The BTC notional leverage ratio on the platform has steadily decreased throughout February, falling from 0.19 to 0.15. Additionally, approximately 30,000 BTC worth of open interest has been wiped from the exchange. Darkfoist explains that this development reflects traders deliberately closing positions and reducing risk, rather than random fluctuations.
Bitcoin reserves on exchanges have remained relatively stable, meaning investors are not rushing to withdraw funds; They are simply reducing leverage. This difference matters, suggesting strategic risk management rather than panic-driven capitulation.
More widespread volatility for the Bitcoin market
Analyst Darkfaust said a number of macroeconomic and geopolitical pressures have contributed to the risk-off environment that has pressured the crypto market with no signs of improvement. He noted that Donald Trump announced the new 10% tariffs after the Supreme Court ruling against the previous tariffs.
At the same time, statements about possible limited strikes against Iran add another layer of geopolitical tension. On the economic front, US economic growth in the fourth quarter was weaker than expected at 1.4%, reinforcing concerns of a slowdown. Meanwhile, core PCE inflation rose to 3% with an unexpected gain.
In such an environment, taking risks becomes much less attractive. Traders believe that volatility driven by macro headlines could quickly liquidate overextended positions.
When leverage declines, it often creates short-term price pressure, as closing out futures contracts can spur selling activity. However, excess leverage makes the market fragile. By liquidating excessively extended positions, the market reduces systemic risk and undergoes a constructive structural reset. At this point, Bitcoin becomes less vulnerable to violent liquidation events and more able to sustain organic price discovery.
At the time of writing, Bitcoin is trading at $67,965, representing a modest increase of about 2.45% over the past 7 days. Meanwhile, the daily trading volume has increased by 36.98% and is valued at $44.98 billion.
Featured image from Flickr, chart from TradingView
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