$BTC Leverage Flush Signals Healthier Market Ahead, Says K33


Research and brokerage firm K33 says the crypto market has entered a healthier phase following one of the largest #liquidation cascades in recent history. Head of Research Vetle Lunde described the reset as constructively bullish, arguing that months of excessive pent-up leverage have been purged from the system.


$BTC perpetual open interest plunged by nearly 50,000 tokens on Oct. 10, representing an 18.6% decline and marking the steepest single-day drop since August 2023. At least $16.7 billion in #leveraged long positions were wiped out as funding rates turned deeply negative, with open interest returning to Q2 lows.


The perpetual contract traded at a record 5.1% discount to spot prices, the widest deviation since the March 2020 crash. Lunde noted this historic flush validated K33's earlier warnings about dangerous #leverage buildups and marked a key turning point for the market, though he urged patience during the recovery phase.


Historical data shows similar open interest plunges have tended to align with market bottoms over the past three years. Daily drops exceeding 10% in Bitcoin perpetual leverage were often followed by negligible drawdowns and substantial long-term gains, according to K33's analysis.

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October 15, 2025 at 5:35 PM
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