Recently, an interesting phenomenon worth noting: Bitcoin derivatives market open interest has been continuously shrinking over the past three months. What does this indicate? It suggests that the market's leverage enthusiasm is gradually cooling down.

Looking at data from mid-January, this deleveraging trend is quite evident. The leverage levels in the derivatives market have been steadily declining, which often means that previous excessive speculation is gradually retreating. It may sound like a bad sign, but conversely, when everyone pulls back their leverage, the market structure is quietly improving.

Why is this important? Because deleveraging often signals the formation of a bottom phase. As speculative positions are cleared and market sentiment stabilizes, it lays a foundation for subsequent upward trends. In other words, this could be the night before the market shifts from bearish to bullish.