The crypto derivatives market experienced a shock: open interest in BTC and ETH collapsed amid the Fed's decision.
The derivatives market on Binance on June 17 showed a sharp deleveraging. Open interest in Bitcoin (BTC) dropped by 18%, and in Ethereum (ETH) by 25%. The reason is the decision by the US Federal Reserve (Fed) to keep the key interest rate unchanged.
Open interest is the total volume of open positions in derivatives. Its sharp decline is a clear sign that traders are massively closing positions and reducing risks, rather than increasing their bets.
How BTC and ETH positions contracted
My analysis of data from Binance shows that open interest in Bitcoin fell from $4.51 billion to $3.7 billion. Approximately $810 million in leveraged positions disappeared from the market. This is one of the most notable short-term contractions in BTC positioning on this exchange.
Ethereum suffered even more in percentage terms. Open interest in ETH on Binance decreased from $2.8 billion to $2.1 billion, removing about $700 million from the market. The current level is close to values from the end of February. This suggests that Ethereum leverage was shed more aggressively than Bitcoin's.
On Binance alone, nearly $1.5 billion in open interest "disappeared" from Bitcoin and Ethereum over a short period. This indicates an overall decline in risk appetite, rather than a sell-off in any single asset.
Why this is linked to the Fed
The deleveraging coincided with the Fed's decision to keep the rate at 3.75%. Although this decision removed one layer of uncertainty, derivatives market traders apparently did not want to hold large leveraged positions during the announcement itself and the volatility that often follows such macro events.
Market participants chose to close positions before and after the Fed's decision to avoid being exposed to leverage during a potential sharp market reaction. The simultaneous decline in both Bitcoin and Ethereum confirms that this was a broad risk-off move.
The decline was not limited to Binance. On the Gate.io exchange, Ethereum contracts also came under pressure — open interest there dropped again to around $1.9 billion. This is another sign that deleveraging occurred across all major crypto exchanges.
My expert opinion: Such a synchronous contraction in the derivatives market is a classic sign of a shift to "risk-off" mode. Traders are not expecting immediate growth but prefer to wait out a period of macroeconomic uncertainty. Investors should pay attention to the resilience of the spot market: if the drop in open interest is not accompanied by a price crash, it may indicate a healthy correction rather than the start of a long-term bearish trend.