After months of aggressive positioning, Bitcoin’s market structure is increasingly defined by caution rather than conviction. Traders are pulling back as macroeconomic and geopolitical risks resurface.
Bitcoin traders adopt deleveraging strategies in volatile markets
According to CryptoQuant analyst Darkfrost, investors are refraining from taking risky leveraged positions in Bitcoin futures. This change in behavior is most noticeable on Binance. It currently dominates global BTC futures trading, accounting for over 31% of total Bitcoin open interest (excluding CME — Chicago Mercantile Exchange).
The BTC estimated leverage ratio on the platform steadily declined throughout February, dropping from 0.19 to 0.15. At the same time, approximately 30,000 BTC worth of open interest was removed from the exchange. Dirkforst explains that this development is not a random fluctuation, but reflects traders intentionally closing positions and trimming their exposure.
Exchanges’ Bitcoin reserves are relatively stable, meaning investors are not in a hurry to withdraw their funds. They’re just reducing leverage. This difference is important and suggests strategic risk management rather than panicked capitulation.
Further macro instability in the Bitcoin market
Analyst Dirkforst noted that several macroeconomic and geopolitical pressures are contributing to a risk-off environment that shows no signs of improving, weighing on the crypto market. He noted that President Donald Trump announced new 10% tariffs in response to the Supreme Court’s ruling on previous tariffs.
At the same time, statements about the possibility of a limited attack on Iran are further escalating geopolitical tensions. On the economic front, the US economic growth rate in the fourth quarter was 1.4%, lower than expected, raising concerns that the momentum will slow. Meanwhile, core PCE inflation rose to 3%, an unexpected upside.
In such an environment, leveraged risk-taking becomes much less attractive. Traders are aware that the volatility caused by macro headlines can quickly liquidate overly expanded positions.
Reduced leverage often creates short-term price pressure as the settlement of futures contracts can increase selling activity. However, excessive leverage makes markets vulnerable. By clearing out overextended positions, the market reduces systemic risk and experiences a constructive structural reset. At this point, Bitcoin becomes less vulnerable to violent liquidation events and is able to maintain natural price discovery.
At the time of this writing, Bitcoin is trading at $67,965, marking a modest increase of approximately 2.45% over the past seven days. Meanwhile, the daily trading volume increased by 36.98%, reaching $44.98 billion.
Featured image from Flickr, chart from Tradingview
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