Have you ever walked into a nightclub at 4 a.m.? The lights are too bright, the music is gone, and the only people left are sweeping the floor. That’s exactly what the Bitcoin perpetual futures market feels like right now.
After the wild ride of 2024 and early 2025, something strange has happened: the leverage has simply… vanished. No drama, no explosion, just a slow, quiet exit. And honestly? I find it fascinating.
The Ghost Town in Bitcoin Perpetual Futures
Let’s start with the hard numbers, because they tell a story most people are missing.
Since the brutal deleveraging event in mid-October, Bitcoin-denominated open interest in perpetual swaps has refused to climb back above roughly 310,000 BTC. Think about that for a second. Earlier in the cycle we were regularly seeing numbers north of 380,000–400,000 BTC. That’s a drop of more than 20–25% that has now persisted for months.
And it’s not bouncing. Every tiny attempt at recovery gets sold into almost immediately. I’ve watched this chart every day for weeks and it feels like the market is stuck in quicksand.
Funding Rates Tell the Same Story
If open interest is the number of bodies in the club, funding rates are the vibe. And right now the vibe is flatline.
Perpetual funding has been drifting lower for months, occasionally flashing negative for days at a time. Longs are no longer willing (or able) to pay shorts to keep their positions open. That used to happen only during panic capitulations. Now it’s becoming the new normal.
“This persistent drift lower reflects a decline in leveraged long conviction, with traders unwilling to pay a premium to maintain upside exposure.”
– Senior on-chain analyst, December 2025
That quote keeps sticking in my head. Traders unwilling to pay for upside. In Bitcoin. In a bull market (supposedly). Wild.
Why Leverage Matters More Than Price (Sometimes)
Here’s something a lot of newer market participants still don’t fully grasp: price can lie, but leverage rarely does.
When open interest and funding are expanding aggressively, moves tend to be violent in both directions. When they contract like this? Volatility dies. The market starts moving like a sleepy blue-chip stock.
We saw Bitcoin trade in a 7% range for almost three weeks straight recently. Three weeks! I can’t remember the last time that happened outside of 2018–2019 bear market doldrums.
- Lower leverage = fewer forced liquidations
- Fewer liquidations = smaller wick and cascades
- Smaller cascades = “boring” price action that drives traders insane
And yet… boring can be incredibly healthy.
A Market Finally Growing Up?
I’ve been in crypto since 2016, and every cycle we say “this time is different” and then watch everyone pile into 50x leverage the moment price ticks up 10%. Maybe, just maybe, this time actually is different.
The October flush felt like a proper cleansing. A lot of 2023–2024 late-comers who were riding 20-30x finally got rinsed. The tourists left. The survivors appear to be trading smaller, or moved to spot, or simply sitting on their hands.
In my experience, these periods of deleveraging and apathy are exactly when the next leg up gets built. Nobody is excited. Nobody is posting rocket emojis. The bid is quiet, patient, and accumulating.
What the Data Says Right Now (December 2025)
Let’s throw some fresh numbers at you:
| Metric | Peak 2025 | Current | Change |
| BTC Perp OI (BTC) | ~405,000 | ~295,000–305,000 | -25% |
| Avg 8h Funding Rate | 0.08–0.12% | 0.01–0.03% | -85% |
| Long Liquidations (30d) | $2.8B | $680M | -75% |
| Basis (Annualized) | 18–25% | 4–7% | Massive compression |
Those aren’t small moves. That’s an entire regime change in how the market expresses speculation.
The Two Ways This Usually Plays Out
Historically, when Bitcoin perps go this quiet, we get one of two outcomes:
- Slow grind higher on spot demand. Leverage stays low, price slowly creeps up as actual buyers step in, funding eventually turns positive again, OI starts expanding — but this time with better hands. Classic 2016–2017 or mid-2020 vibe.
- Another flush lower. The lack of leverage protects the downside at first, but if spot demand never shows up, price eventually breaks structure and we get one final capitulation shakeout. Think March 2020 or November 2022.
Right now I’m leaning toward scenario 1, but with eyes wide open. The ETF flows have been decent, exchange balances keep dropping, and long-term holder supply is at all-time highs. Those are not the ingredients of a final leg down — at least not yet.
What Should Traders Do in a Deleveraged Environment?
If you’re still trying to trade 20x perps in this tape, you’re fighting the market. I’ve learned the hard way that when leverage dies, the smart move is to adapt or sit out.
- Reduce position size dramatically (I’m personally running 3–5x max right now)
- Focus on spot accumulation or very low-leverage swing trades
- Watch the funding rate like a hawk — the moment it flips sustainably positive again, that’s your green light
- Pay attention to CVD (cumulative volume delta) on spot exchanges rather than futures noise
- Don’t fight boredom — some of the best gains come from doing nothing for months
Sounds obvious, but most people can’t stand the quiet. They force trades and get chopped up until the real move finally arrives.
Final Thoughts: Enjoy the Silence
Look, I get it. Low volatility feels terrible when you’re used to 10% daily candles. But if you zoom out, these periods of deleveraging have almost always preceded the healthiest parts of Bitcoin bull runs.
The market needed to take a breath. The tourists got washed out. The leverage addicts are in rehab. And the asset continues to quietly move into stronger hands.
Whether we get a slow grind or one final scare, the fact that perps have turned into a ghost town tells me one thing for sure: the next real move — when it finally comes — will be driven by spot demand, not borrowed money.
And in Bitcoin, that’s usually when things get really interesting.
So maybe turn down the leverage, grab a coffee, and enjoy the quiet. The music always comes back on eventually.
