The Fear and Greed Index in the cryptocurrency industry pulled back to 65 points on August 26, after reaching 74 the day before. This signals that bullish sentiment persists, but without euphoria. However, the key feature of the current rally is the unusual structure of the derivatives market: open interest (OI) in bitcoin futures has fallen to nearly a five-month low, even though the leading cryptocurrency gained 22.4% over the week (according to CoinGecko).
Price Rises, but Leverage Does Not
At the time of the analysis, bitcoin is trading around $79,000, after breaking through the $80,000 level during the momentum move. The decline in OI and moderate funding rates indicate that the upward movement is not backed by a massive accumulation of leveraged long positions. This is an important signal: the market is growing due to spot demand, not speculative frenzy.
According to Glassnode data, OI in bitcoin futures has decreased from 645,760 BTC (August 14) to 587,584 BTC. Over the same period, the price rose from roughly $62,000 to $80,000. Typically, such dynamics are accompanied by rising OI, but now we are seeing the opposite process — a significant portion of the momentum was driven by the closing of short positions rather than the opening of new longs. Funding rates for perpetual futures remain below 10% annually, indicating only a moderate tilt toward bulls.
Particularly telling is the change in collateral structure: OI in futures with cryptocurrency collateral has dropped to an all-time low — approximately 52,000 BTC, accounting for just 11% of the market. This confirms that traders are in no hurry to build up risky positions.
ETFs Continue to Attract Capital
In parallel, U.S. spot bitcoin ETFs are recording their seventh consecutive positive session: on August 25, inflows totaled $314.3 million, of which $284.4 million came from BlackRock's IBIT. This indicates that institutional interest is shifting toward regulated instruments, which in turn reduces the strain on the derivatives market.
XRP — an Exception with Correction Risk
Unlike bitcoin, leverage in XRP is actively growing. Over the week, the asset gained roughly 42%, and the estimated leverage ratio on Binance jumped to 0.21 — the highest since January. XRP futures trading volume reached $6.4 billion per day, compared to $1.2 billion on the spot market. The ratio of long to short positions on Binance is approximately 2:1, and among large traders — nearly 3:1. With such an imbalance, any further price decline (on August 26, XRP fell almost 5%, to $1.44) could trigger a cascade of forced liquidations and amplify the correction.
My conclusion: the current dynamics of bitcoin represent a healthy rally backed by real demand, while XRP shows classic signs of overheating. In the coming days, it is worth closely monitoring funding rates and OI: if they begin to rise sharply, that will be the first warning sign of a reversal. For now, the market looks more resilient than it seems at first glance.