Bitcoin News Today: Crypto's 'Extreme Fear' Drives 30% Drop in Bitcoin Speculation

The total open interest of Bitcoin futures contracts across exchanges has plummeted by 30% from its October peak, signaling a sharp decline in speculative activity and liquidity in the cryptocurrency market. As of November 18, open interest stood at $66.54 billion, down from a high of $94.12 billion on October 7, according to Coinglass data. This contraction reflects a broader trend of market participants scaling back leveraged positions amid heightened uncertainty and weak investor sentiment.

Crypto market sentiment has deteriorated to "extreme fear," with the Fear & Greed Index hitting a near nine-month low of 10 in late November. Bitcoin, the largest cryptocurrency by market capitalization, fell below $100,000 for the second time this month, trading at $96,428 as of November 15. The selloff has been attributed to a mix of profit-taking by long-term holders, institutional outflows, macroeconomic uncertainty, and the liquidation of leveraged long positions. The wider crypto market, as measured by the CoinDesk 20 index, lost 5.8% of its value over the same period.

Institutional investors have also retreated. Harvard University's endowment, which holds a $443 million stake in BlackRock's iShares Bitcoin Trust (IBIT), reported the position in its third-quarter 13F filing. Despite this, Bitcoin ETFs have seen sustained outflows, with U.S.-listed funds losing $866 million in a single day following the end of the government shutdown. These outflows reflect a broader cooling in demand for crypto products, particularly as investors reassess risk exposure amid a lack of regulatory clarity and macroeconomic headwinds.

The decline in open interest is part of a broader cooldown in speculative activity. Altcoin derivatives markets have also seen a sharp drop in open interest, with metrics nearing cycle lows. On-chain analytics firm Glassnode noted that traders are adopting a defensive stance, prioritizing capital preservation over aggressive bets. This trend is mirrored in retail demand, where futures open interest for assets like XRP and Chainlink has fallen by over 70% from mid-year highs.

Market participants are now watching for potential catalysts. Cboe Global Markets plans to launch perpetual-style Bitcoin and Ether futures in December, offering a regulated alternative to unlisted derivatives. Meanwhile, the crypto Fear & Greed Index remains at extreme fear levels, with only 45.9% of investors anticipating a December Federal Reserve rate cut - a drop from earlier optimism. Analysts caution that without renewed inflows or regulatory progress, Bitcoin's recovery may remain fragile as the market grapples with thinning liquidity and prolonged uncertainty.