Crypto Pullback: Liquidations Spike, Open Interest Drops

On Dec. 5 the crypto market eased, with Bitcoin and most major altcoins sliding as leveraged positions were liquidated and futures open interest contracted.

Bitcoin slipped from highs above $93,000 earlier in the week to below $90,000. Notable underperformers included Canton, MYX Finance, Aptos, Hyperliquid, Morpho and Aerodrome Finance.

Daily futures open interest fell 4.35% to about $127 billion, a marked decline from the October peak near $225 billion. The reduction in open interest reflects continued deleveraging after the roughly $20 billion wipeout on Oct. 10; prices frequently remain pressured while open interest trends lower.

Liquidations surged more than 75% versus the prior day, reaching $491 million and wiping out positions from around 135,667 traders. Bitcoin accounted for roughly $191 million of those liquidations and Ethereum about $116 million. Other heavily liquidated tokens included Solana, XRP and Fartcoin. Rising bullish liquidations tend to add selling pressure and amplify downward moves.

The pullback arrives ahead of a large options expiry worth over $4.8 billion. Bitcoin options exceeding $3.5 billion will expire with maximum pain around $91,000, while Ethereum options north of $700 million carry maximum pain near $3,050. Large expiries often increase volatility in the run-up and aftermath.

Profit-taking after Bitcoin’s rapid rebound from about $80,000 to above $93,000 in under two weeks also contributed to the retracement. Looking ahead, traders are watching the Federal Reserve’s interest-rate decision next Wednesday. Polymarket prices show the probability of a 25-basis-point cut has climbed to roughly 93% from under 50% last week; while an actual cut could be supportive for crypto, the Fed’s guidance will likely influence near-term market direction.