Analyst: Ethereum Market Cap Sheds $54 Billion in Nearly Three Weeks as Derivatives Market Keeps Deleveraging

October 25: Crypto analyst Darkfost said in a post that the altcoin market has been broadly weak over the past three weeks, with Ethereum's price pulling back about 15% and its market cap shrinking roughly $54 billion. On the derivatives side, ETH open interest on Binance fell $1.3 billion over the past month, a drop of nearly 20%, to $5.7 billion, while network-wide ETH open interest declined to $11.5 billion.

Darkfost noted that this round of deleveraging was driven by a combination of falling prices, cascading liquidations and traders actively closing positions to reduce risk. Looking back at July this year, Ethereum also went through a sharper contraction in open interest, after which it stabilized and rebounded, gaining more than 32%, with its price briefly breaking above $2,800. In his view, deleveraging is part of the market adjustment process; such phases are often accompanied by panic sentiment and may also occur at the tail end of a correction.