Largest leverage flush on Binance: open interest in BTC and ETH collapses amid Fed decision
On June 17, the derivatives market on Binance experienced a massive "detonation" of leverage. Open interest in Bitcoin dropped by 18%, and in Ethereum by 25%. The reason is the decision of the U.S. Federal Reserve to keep the key interest rate unchanged. This is not just a correction—it is a systemic risk-off move affecting both leading cryptocurrencies.
Open interest (OI) is the total volume of open positions in futures and perpetual contracts. A sharp decline in this metric signals that traders are massively closing trades and reducing risks, rather than increasing bets. This is exactly what we are seeing now.
According to my analysis of CryptoQuant data, open interest in Bitcoin on Binance decreased from $4.51 billion to $3.7 billion. Approximately $810 million in leveraged positions have left the market. This is one of the most notable short-term reductions in BTC positioning on the largest exchange in recent weeks.
Ethereum showed an even more aggressive sell-off. OI for ETH on Binance fell from $2.8 billion to $2.1 billion, "evaporating" about $700 million. The current level is close to values from the end of February. This indicates that leverage on Ether was shed much more actively than on Bitcoin. In total, on Binance alone, nearly $1.5 billion in open interest disappeared within a short period.
Why did this happen right now?
The sell-off 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 and subsequent volatility. Market participants chose to close positions before and after the Fed decision to avoid staying leveraged during a potential sharp market reaction. The simultaneous decline in both BTC and ETH confirms that this was a broad risk-off move, not a sell-off of a single asset.
The decline was not limited to Binance. On the Gate.io exchange, Ethereum contracts also came under pressure—open interest there dropped to approximately $1.9 billion. This is another sign that the leverage reduction occurred across all major crypto exchanges.
My expert conclusion: We are witnessing a classic market reaction to a macroeconomic trigger. Traders are hedging by shedding leverage to avoid being caught in a cascade of liquidations. However, the OI decline itself is not a bearish signal—it is more of a "cleansing" of the market from excessive leverage. In the medium term, this could create a healthier foundation for the next move, provided the macroeconomic backdrop does not worsen. Watch for OI recovery—it will be the first sign of a return in risk appetite.