Bitcoin is undergoing a steady deleveraging process but has not yet reached the conditions indicative of a market bottom, according to a new analysis. Data shows falling futures open interest on the Chicago Mercantile Exchange and a compressed yield curve, signaling reduced speculative demand. Analysts suggest these metrics point to a consolidative or mid-cycle bearish regime, with a definitive capitulation likely still to come.
Bitcoin markets are experiencing a reset, though the leading digital asset has not yet formed a bottom for the current bear cycle. A report indicates ongoing deleveraging is evidenced by falling open interest and yield curve compression on the Chicago Mercantile Exchange.
The CME basis compression, a futures yield curve reflecting demand for leveraged long exposure, has been in a downward trend since 2025. This pattern follows those seen before the 2019 and 2022 bear markets, though the curve slope remains positive. “The curve reflects an environment where price rallies may face resistance until a definitive cyclical bottom forms.”
Historically, cycle bottoms have only formed when this yield curve slope turned negative, signaling acute deleveraging. The current positive slope suggests leverage demand and risk appetite are cooling but capitulation has not occurred. This indicates that more downside for bitcoin may still be ahead.
Additional confirmation comes from a sharp decline in futures open interest. The CME Bitcoin futures open interest has plummeted by 47%, similar to the 45% plunge witnessed in 2022. This reflects a major unwind of leveraged positions following a period of increased participation.
The combination of declining open interest and a positive yield curve suggests the current regime is consolidative or mid-cycle bearish. Analysts conclude that definitive capitulation is likely still to occur in the near future.
