David Lawant, head of research at institutional exchange FalconX, wrote in a market update that this follows large liquidation events in the past.
Open interest, which is the total amount of open options and futures contracts held by market participants, has declined significantly.
The report pointed out that open interest in BTC and ETH derivatives on mainstream exchanges such as Binance has dropped by approximately 38% from this year’s highs and is currently close to March levels.
“The significant decline in open interest over the past six months suggests that liquidations should play a less significant role in spot price movements,” Lawant said.