In the middle of March the price of Bitcoin (BTC) plunged from $8,000 to $3,850, with most of this drop occurring within a day. This resulted in a powerful long squeeze on crypto derivatives markets. Basically anyone who was betting on Bitcoin’s (BTC) price to go up got liquidated and speculation on crypto derivatives markets has not recovered since then.

On BitMEX the open interest on the Bitcoin (BTC) contract has declined from $1.2 billion to $0.5 billion, with the $700 million difference being positions that were liquidated when the crypto crash happened. The notable thing is that it’s been almost 2 weeks since the crash. Bitcoin’s (BTC) price is rising, yet open interest on BitMEX has not recovered much.

It is possible that this is due to traders distrusting BitMEX following the catastrophic amount of liquidations earlier this month.

That being said, open interest has declined on all other crypto derivatives exchanges as well, including OKEx, FTX, Binance, ByBit, Huobi, CME, Kraken, Bitfinex, and Deribit. Considering that crypto derivatives speculation has declined across the board, the decline in open interest could be due to uncertainty over where the market is going next.

The silver lining to this is that the spot market is more dominant now, and indeed the spot market has led the crypto recovery since the crash earlier this month.