BlockBeats News, October 13th, CryptoQuant analyst EgyHash stated that the cryptocurrency market has experienced one of the most severe price corrections in history, examining several key market indicators to assess its potential impact. After reaching recent highs last week, the open interest of Bitcoin futures contracts sharply dropped by $12 billion, decreasing from $47 billion to $35 billion. This was one of the most significant recent contractions in futures positions. The funding rate has also gradually declined over the past few months and briefly turned negative during Friday’s market crash. Despite this decline, the rate later rebounded to a moderately positive level, and market sentiment has once again normalized.
It was observed that Bitcoin’s Estimated Leverage Ratio (ELR) significantly decreased, indicating an overall deleveraging process in the derivatives market. Furthermore, the Bitcoin Stablecoin Supply Ratio (SSR) has dropped to the lowest level since April this year. This trend suggests an increase in stablecoin liquidity relative to Bitcoin, potentially indicating enhanced off-exchange buying power. Overall, although the market flash crash caused short-term pain, the recent collapse has effectively reset the overall leverage positions. Historically, such large-scale deleveraging events often foreshadow a significant long-term upward trend.
