Bitcoin derivatives traders are re-entering the market following an eight-month deleveraging phase, signaling a return of risk appetite despite a volatile economic climate. CryptoQuant analyst Darkfost identified the shift after observing Binance futures open interest climb back above its 180-day moving average in early May 2026. This resurgence marks the end of a prolonged period of market caution that initially took hold in late 2025.
The deleveraging stretch is being compared to the market setup seen in 2022, just before the FTX collapse triggered massive liquidations. This recent phase began immediately after the “October 10 event” on October 10, 2025. Darkfost noted that a deteriorating global macroeconomic and geopolitical backdrop led traders to aggressively reduce risk. “Since early May, however,” Darkfost observed, Binance open interest has risen, suggesting that Bitcoin’s sharp correction actually attracted speculative traders looking for a rebound.
Market activity has intensified over the last several months. Binance futures open interest grew from $6.4 billion in March 2026 to approximately $8.96 billion by May 22. This represents a $2.56 billion increase—roughly 40%—over an 82-day period. This rise above the $8.75 billion 180-day moving average suggests that speculators are once again willing to use leverage to capitalize on Bitcoin price analysis trends and potential price swings.
Institutional inflows and spot Bitcoin ETF volatility
While derivatives traders are stepping back in, the spot market has shown significant fluctuations throughout May. Earlier in the month, institutional investors poured nearly $1 billion into spot Bitcoin ETFs in a single week, marking the strongest demand in four months. However, the week of May 11-15 saw a sharp reversal, with cumulative outflows exceeding $1 billion. This was followed by a $649 million net outflow on May 18, the third-largest single-day exit of 2026.
The fluctuating interest from institutional desks is occurring as Bitcoin exchange supply remains at historically low levels. On May 13, the Bitcoin Fear & Greed Index sat at 76/100, indicating a state of “Greed.” By May 20, that sentiment cooled significantly to a level of 40, placing the market on the boundary between neutral and fear as price volatility impacted trader confidence.
The impact of this volatility has been felt even by the market’s largest holders. Reports from the first quarter of 2026 show that Strategy’s Bitcoin holdings, totaling 818,334 BTC, reflected an unrealized loss of $14.46 billion. Such figures highlight the risks present in the current crypto market liquidation environment, particularly when leveraged positions meet unexpected macroeconomic shifts.
Macroeconomic pressure and resistance levels
The return of speculative risk comes at a time when traditional market pressures are mounting. Mid-May data showed stronger-than-expected US inflation, with a Consumer Price Index (CPI) of 3.8% and a Producer Price Index (PPI) of 6%. These numbers have pushed back expectations for interest rate cuts. Additionally, elevated geopolitical tension in the Middle East has triggered periodic sell-offs as traders react to global uncertainty.
As of May 22, 2026, Bitcoin was trading around $77,145. The price has faced heavy resistance recently, notably testing zones between $85,000 and $95,000 on May 12 before moving lower. By May 21, the price had slid from $82,000 to $76,000 in just two weeks, reflecting a roughly 7.5% drawdown that has tested the resolve of newly leveraged traders.
Whether this return to leverage can be sustained remains to be seen. If Bitcoin fails to reclaim the $80,000 level it briefly broke earlier this month, the market could face the risk of a “long squeeze.” For the time being, the move in Binance futures open interest suggests that traders are looking past the deteriorating macro climate in hopes of a significant price recovery in the coming months.