Bitcoin Futures Open Interest Dips 30% After Oct 11 Crash as Funding Rate Narrows to Neutral and Liquidation Risk Drops

COINOTAG News, citing Glassnode on October 21, notes that in the wake of the October 11 crash, the Bitcoin futures open interest declined by about 30%, signaling a meaningful deleveraging of speculative exposure. The retreat in open interest indicates a reduction in market leverage and a lower probability of abrupt margin calls. With the funding rate drifting back toward neutral, liquidity risk in the derivatives market appears to have diminished.

Market participants should recognize that a neutral funding rate reduces the likelihood of cascading liquidations and supports steadier price discovery. Analysts suggest the current backdrop improves risk‑reward dynamics for both long‑term holders and prudent traders, though ongoing monitoring of open interest and funding costs remains essential. This environment underscores the importance of disciplined risk management and clear exit strategies in a still‑volatile crypto landscape.