Crypto markets appear to have moved beyond the leverage stress seen in October, according to asset manager Grayscale. Recent research shared by the firm suggests that derivatives activity has stabilized, supply pressure has eased, and market direction is now more closely tied to fundamentals and political developments. As a result, price action may better respond to upcoming regulatory and institutional changes rather than past disruptions.
In brief
- Grayscale reports that after the October 10 deleveraging, crypto prices are no longer driven by this factor, while derivatives activity has stabilized on major platforms.
- Futures open interest stabilized near $50 billion in November and December, indicating continued participation after the October selloffs.
- Bitcoin moved in narrow ranges in December, with low volatility and light spot volumes, pointing towards a consolidation phase.
- On-chain data showed no major selling by long-term holders, reducing supply risks as markets turn to politics and institutions.
Derivatives Reset Complete, Grayscale Sees Stable Crypto Exposure
Grayscale noted on social platform X that after the October 10 deleveraging, this factor no longer plays a significant role in recent crypto valuations. The focus has shifted from forced exits to forward-looking drivers, including more stable derivatives markets and reduced selling by long-term holders.
Derivatives data October showed a sharp reset on major platforms after large sell-offs in perpetual futures markets. Open interest on OKX, Bybit, Binance and Hyperliquid increased from around $90-100 billion at the end of September to around $55 billion following the October 10 event.
Instead of continuing to decline, aggregate open interest moved sideways in November and December, remaining around $50 billion. Binance and Bybit continued to hold the largest shares, while OKX and Hyperliquid maintained smaller but consistent positions.
Grayscale said that based on these trends, recent prices have not been influenced by persistent leverage. Open interest in futures increased slightly in December, while open interest in options declined primarily due to contract expirations rather than position closures. Taken together, these activities indicate stable exposure rather than aggressive risk taking.
Bitcoin Consolidates in December as Long-Term Holders Remain In Place
Several signals reinforced the idea that December was a consolidation phase:
- Futures open interest remained stable across major platforms.
- Options positions declined primarily due to scheduled expirations.
- Bitcoin has been trading in tight price ranges.
- Market volatility remained contained.
- Spot trading volumes remained relatively low.
Patterns observed on derivatives platforms suggested that traders remained engaged after the October reset rather than exiting the market. Price behavior during this period is consistent with this view, as Bitcoin showed little directional movement and no sharp rise in volatility.
Supply-side data also eased concerns about selling pressure. Grayscale reported no indications of significant selling of Bitcoin by early-stage investors, often referred to as “OG whales.”
On-chain data following the latest coin movement showed that the average lifespan of Bitcoin increased during December. Rising lifespan readings generally indicate holding rather than selling, suggesting that early holders have not added pressure during the month.
Long-term holder activity followed a similar pattern. The absence of significant sales reduced the risk of a structural oversupply, especially since the tax-related flows observed earlier in the year had already passed. With leverage pressures fading, Grayscale said future crypto pricing is more likely to respond to clearer policy signals and increasing institutional activity.
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