Crypto sell-off saps $1.5B in open interest, funding rates dip negative

Low levels of volatility, which had plagued the market for over a month, finally cracked on Thursday as price action sent derivatives reeling

article-image

Jacco/Shutterstock, modified by Blockworks

share

After weeks of inactivity, crypto sprang to life Thursday, sending shockwaves throughout the derivatives market.

Total open interest for bitcoin, a measure of the total futures contracts outstanding, fell by just under $1.5 billion across Bybit, Binance, OKX and Deribit, data shows.

Rising open interest generally indicates that new money is coming into the market, reflecting increased interest or bullish sentiment. Declining interest suggests the market is becoming less interested in the underlying asset, reflecting bearish sentiment.

Source: Velo

While spot market valuations witnessed steep losses, derivatives traders were hardest hit with liquidations on long positions wiping more than $200 million over a 24-hour period, Blockworks previously reported.

“Generally, traders have stop losses set and a trigger of news catalysts might drive cascades of liquidations, not necessarily indicating active sell pressure but more so the aftermath of a liquidation effect,” Sylvia To, research lead at crypto exchange Bullish told Blockworks.

Open interest across large-cap digital assets, meanwhile, fell between 2% and 25%. The bitcoin-led sell-off drove futures open-interest-weighted funding rates into negative territory, dipping to its lowest point since March, CoinGlass data shows.

Source: Coinglass

Negative funding rates, alongside open interest and liquidation data, can often indicate that the majority of market participants are shorting a given asset. 

Extreme negative funding rates have sometimes been followed by sharp price reversals as witnessed by a move that followed a 25% jump in spot prices five months ago.

Global crypto market capitalization now stands at $1.1 trillion, marking a decrease of 6.2% in the last 24 hours and a drop of 5.4% compared to one year ago, CoinGecko data shows.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (10).png

Research

Innovations on Aptos’ technical design through Raptr, Shardines, and Zaptos approach near-optimal latency and throughput by unlocking 100% utilization of network resources, with the capacity to settle 260k transactions per second with latencies less than 800ms. The original Move language was revamped with the launch of Move 2, supporting more expressivity in smart contract logic and a scalable ability to interact with high volume datasets. The ecosystem has benefitted from strong asset inflows, now hosting over $1.3B in stablecoins, $450M in bridged BTC, and $530M in RWAs. Activity in the Aptos ecosystem has grown notably over the past year, with monthly application revenue reaching ~$835k and monthly DEX volumes growing to over $5B, both at new all time highs.

article-image

The Stripe-acquired firm has big plans for a streamlined, multi-wallet future

article-image

Both founders of the former crypto lender have now landed in new crypto industry roles

article-image

Bitcoin’s recent peak is a victory lap for curvers left and right

article-image

Securitize CEO Carlos Domingo says institutions are eager to get exposure to tokenization

article-image

Trade isn’t war and prosperity isn’t a contest