The degree of leverage in the bitcoin (BTC) futures markets fell sharply following the liquidations on Friday, October 10.
According to data from CryptoQuant, the indicator “Estimated futures leverage ratio for the USDT pair on all exchanges”, stepped back at levels at the beginning of the year, marking a general deleveraging in the market.
That metric measures how much leverage, on average, BTC futures traders using USDT as collateral. It is calculated by dividing open interest (OI) by USDT reserves on exchanges. When the ratio goes up, indicates that more contracts are being opened with less collateral available. When it goes down, the market reduces risk and liquidates speculative positions.
As seen in the graph below, the ratio had been on an upward trend since 2020, when it hovered between 0.15 and 0.25, until reaching levels of 0.50 at the beginning of October 2025. The sustained increase in this metric reflected a market with increasing use of leverage.
However, after the recent correction, which took bitcoin from USD 122,000 to USD 103,000 (with a subsequent recovery), the indicator fell abruptly, to 0.37 points, evidencing a process of cleaning up excess risk.
In parallel, open interest in BTC futures fell from $47 billion to $35 billion, its largest adjustment in more than two years, CriptoNoticias reported. This decrease of 12,000 million shows the closing of a large number of leveraged positions and a return to a more balanced structure.
Deleveraging reduces the probability of a “long squeeze”, that is, a chain of liquidations of long positions that aggravates price declines. Analysts, such as CryptoQuant CEO Ki Young Ju, hold that these types of adjustments allow the bullish cycle to continue more organicallywith greater support in cash demand and less exposure to credit.