Bitcoin derivatives reset as leverage cools amid subdued spot demand​

• Bitcoin's recent correction wiped out nearly 20% of futures open interest, signaling a broad leverage reset.
• Glassnode stated that subdued spot activity and growing options hedging point to cautious sentiment despite stable futures positioning.
• Strategy bought 520 BTC, with JAN3 CEO Samson Mow defending the company's new STRC preferred stock design.

Bitcoin's recent correction has reduced leverage across derivatives markets, creating a healthier structure amid weak spot trading activity, according to a report from CryptoQuant on Monday.

The report stated that Bitcoin's decline over the past few weeks appears to reflect a broad futures market reset rather than the buildup of new speculative positions.

"BTC price is down, but open interest is down even more. This suggests the futures market has gone through a meaningful leverage reset,” CryptoQuant analyst Woominkyu wrote.

Leverage reset points to a healthier derivatives market

Total Bitcoin open interest across exchanges fell from $25.96 billion on June 1 to $20.89 billion by June 21, a 19.5% decline, while Bitcoin's price dropped about 11.4% over the same period.

"This is important because price falling together with OI usually means existing futures positions are being closed, liquidated, or reduced," the report added.

The firm added that although the reset does not guarantee an immediate recovery, it leaves the market in a healthier position than one dominated by excessive leverage.

Glassnode highlighted a similar trend in its Weekly Market Pulse. The analytics firm noted that Bitcoin's futures open interest currently stands at $31.2 billion, comfortably within its historical statistical range. This suggests that traders are neither aggressively increasing leverage nor rapidly unwinding positions.

Options activity, however, has continued to grow. Glassnode reported options open interest at $34.4 billion, reflecting increased participation and hedging activity among market participants.

However, the firm warned that recent price swings may not be fully reflected in options pricing.

"Volatility Spread has turned deeply negative, indicating that realized price swings are currently outpacing the premiums priced into options contracts," Glassnode wrote.

Spot market activity also remains soft. Glassnode reported that aggressive sellers have regained control of order flow, with Spot CVD falling into negative territory. Meanwhile, daily spot trading volume has declined to approximately $5.1 billion, near the lower end of its historical range.

"Such a contraction suggests waning interest among market participants, often preceding periods of consolidation as the broader trend lacks the necessary liquidity for expansion," the firm noted.

Strategy acquires 520 BTC as Mow praises STRC pricing model

Despite subdued trading activity, corporate Bitcoin accumulation continues. Strategy announced it had purchased an additional 520 BTC for approximately $35 million, bringing its total holdings to 847,363 BTC.

The company also said it boosted its US dollar reserves by $300 million to $1.4 billion. JAN3 CEO Samson Mow stated in an X post on Monday that Strategy's recently launched STRC preferred stock is designed to self-correct when it trades below its $100 par value.

“Think of each unit of STRC as $100 but you can buy it for less sometimes, depending on market conditions. If you buy one share of STRC for $90, the effective yield is 12.78%,” Mow wrote.

Mow argued that the combination of higher yield and potential price recovery creates a natural incentive for investors to buy discounted shares. He added that STRC is not designed to maintain a fixed peg but instead relies on market forces and Strategy's expanding Bitcoin holdings.

As a result, Mow stated that the instrument is operating as intended and could return to par within weeks.

BTC is trading at $63,880, down 0.1% over the past 24 hours at the time of writing.