So, here’s the thing, Bitcoin is currently in an interesting deleveraging phase to watch. I’ve seen from the latest data that CME futures open interest has already decreased significantly, and what's most interesting is that the CME basis continues to compress. This indicates that demand for long leverage exposure is starting to decline.

If we look at the CME yield curve, it’s still positive up to now, although the trend has been downward since early 2025. The pattern is somewhat similar to what happened before the 2019 and 2022 bear markets. But importantly, this condition has not yet shown signs of acute capitulation that we usually see when a cycle bottom forms. The curve will only turn negative if backwardation actually occurs, and that hasn’t happened yet.

From the data I monitor, the decline in CME Bitcoin futures open interest has reached 47% from its peak. This figure is comparable to the 45% decline that occurred in 2022. This isn’t sudden capitulation, but more like a gradual unwinding of risky positions. Prolonged liquidations, decreasing speculative demand—all indicate an ongoing deleveraging cycle.

What’s interesting is the combination of declining open interest and the still-positive curve. This signals that the market is currently in a consolidation or bearish phase within the cycle. Market participants are less willing to pay premiums for BTC exposure, meaning bullish sentiment is starting to weaken.

According to further analysis, the cycle bottom likely hasn’t fully formed yet. This means BTC still has room to fall further before we see true capitulation and the formation of a solid bottom. Long-term contracts are still trading at a premium compared to spot and short-term futures, but pressure continues.

So, in summary, we’re seeing a measured market reset, not panic selling. The bearish momentum is there, but it hasn’t reached the extreme levels that usually mark a cycle reversal. We need to keep monitoring this condition to see when clearer signs of capitulation truly emerge.