Was Last Week’s Deleveraging Event a Necessary Reset for The Bitcoin Market? Glassnode Weighs In

Friday, October 10, was one of the most memorable days in crypto ￰0￱ market witnessed its largest liquidation event amid trade tensions between the U. S and ￰1￱ incident spread across and has affected several parts of the market, including the spot, futures, and derivatives ￰2￱ the event led to massive losses for investors, the market research firm Glassnode believes the deleveraging was a necessary reset for the market. A Necessary Reset As the market witnessed the wipeout of more than $19 billion in open interest, futures funding has dropped to levels not seen since the 2022 bear ￰3￱ unwound rapidly, triggering widespread liquidations and a sharp market ￰4￱ like the Bitcoin Relative Strength Index (RSI) and Cumulative Volume Delta (CVD) have demonstrated the extent of the ￰5￱ RSI fell 26% from 71.7 to 52.8, indicating a shift from strong bullish momentum to ￰6￱ CVD declined 3,883.5% from $8.6 million to -$326.9 ￰7￱ RSI demonstrates cooling buying momentum, while spot CVD shows intensified sell ￰8￱ former reflects a moderation in market enthusiasm, while the latter indicates growing bearish sentiment amid trader anticipation for further ￰9￱ the other hand, futures open interest has contracted, reflecting a decline in risk across derivatives markets as investors realize ￰10￱ open interest has decreased from $48.7 billion to $45.1 billion, while funding rates have plummeted by over 51%, from $2.9 million to $1.4 million.

Additionally, perpetual CVD has dropped below its low statistical band, signaling intense selling pressure and dominant bearish ￰11￱ Slowly Rebuilding Furthermore, open interest in the options market has risen 12.9% as traders reposition themselves for new volatility ￰12￱ rise signals meaningful market engagement and moderate speculative or hedging ￰13￱ analysts say the modest rise in skew indicates renewed demand for downside protection as investors exercise more ￰14￱ shifts in rates and open interest cleared excess leverage, recalibrated short-term sentiment, and reduced speculative ￰15￱ the latest development, the broader market structure has remained intact with continued exchange-traded fund (ETF) flows and elevated spot trading ￰16￱ leveraged participants flushed out, structural capital and institutional demand remain ￰17￱ market is now in a consolidation phase, with confidence slowly rebuilding across the spot and derivatives segments.