Bitcoin Open Interest Falls as Bears Pay to Stay Short

Bitcoin fell more than 2% in 24 hours to about $82,800 as futures open interest dropped to 652,000 BTC, among its lowest levels this year, from a peak of 800,000. Perpetual funding turned negative, averaging minus 0.3% across major exchanges, meaning short sellers are paying longs to keep bearish positions open.

The decline followed President Donald Trump declining to rule out further strikes on Iran before the U.S. midterm elections. Bitcoin remains more than $20,000 above its summer cycle low and was still the best-performing asset of the third quarter, but the derivatives data show weaker demand for leveraged exposure.

Why it matters

Open interest tracks active futures positions, while funding rates indicate which side is more willing to pay to maintain its position. Falling open interest alongside negative funding suggests traders are closing positions as sentiment weakens, with the remaining leveraged exposure tilted toward shorts. It does not establish how spot-market investors are positioned.

The pressure is not limited to Bitcoin. Gold fell 3% to about $4,150 an ounce, while the dollar index climbed above 101 as U.S. Treasury yields rose. Higher yields can make income-bearing assets more attractive than Bitcoin and gold, which pay no income.

Market impact

The 10-year Treasury yield moved above 5.2% and the 30-year yield above 5.51%. The long-duration Treasury ETF TLT fell to about $79, an all-time low, as higher yields weighed on bond prices. A resilient U.S. economy may be supporting the dollar and yields, while persistent inflation concerns may also be pushing borrowing costs higher.

The next signal is whether Bitcoin's open interest and funding stabilize. Until then, the data point to weak leveraged demand and a market where bearish futures positions are paying to remain open, while rising yields add competition for non-yielding assets.