On August 26, the cryptocurrency fear and greed index dropped to 65 points after reaching 74 the previous day, as reported by Alternative.me. Concurrently, open interest (OI) in Bitcoin futures fell to nearly a five-month low, despite Bitcoin's impressive 22.4% increase over the week (CoinGecko).
Source: Alternative.me.At the time of writing, Bitcoin was trading just below $79,000 after hitting $80,000 during a recent rally. The decline in OI and moderate funding rates suggest that this price increase has not been accompanied by a widespread accumulation of leveraged long positions.
Daily chart of BTC/USDT on Binance. Source: TradingView.Another indicator pointing to the market's rapid recovery is the Bull Score from CryptoQuant, which surged from 30 to 80 over the week, marking the highest level since October 6, 2025, according to CoinDesk. Eight out of ten on-chain and market metrics tracked by the firm are in bullish territory.
CryptoQuant estimates that visible spot demand is growing at its fastest rate since late December. Analysts have noted a simultaneous increase in demand in both spot and futures markets for the first time since early October 2025.
Open Interest Declines Despite Price Gains
The structure of Bitcoin futures contrasts with market sentiment. According to Glassnode, open interest measured in Bitcoin decreased from 645,760 BTC on August 14 to 587,584 BTC, marking a near five-month low.
Source: Glassnode.During the same period, the price of Bitcoin rose from approximately $62,000 to $80,000. Typically, such significant price movements are accompanied by an increase in open interest due to new leveraged positions. However, this time, the figure declined instead.
A considerable portion of the initial momentum was driven by the closing of short positions. Funding rates for perpetual futures remain below 10% annually. CoinDesk estimates this indicates a moderate prevalence of bullish positions, with no signs of aggressive long accumulation.
The collateral structure has also changed. Open interest in futures with cryptocurrency collateral has dropped to around 52,000 BTC, a historical low, with these contracts accounting for 11% of the market.
Spot ETFs Attract Another $314 Million
Amid the declining open interest, inflows into U.S. spot Bitcoin ETFs have continued. On August 25, these funds attracted $314.3 million, marking the seventh consecutive positive trading session. The BlackRock IBIT accounted for $284.4 million.
Source: SoSoValue.Leverage in XRP Increases
In contrast, the market structure for certain altcoins appears different. Following a 42% increase in XRP over the week, the calculated leverage ratio on Binance rose to 0.21, the highest since January. The CryptoQuant metric compares open interest in derivatives with the available asset supply on exchanges: an increase indicates a rise in leveraged positions relative to available collateral.
In the last 24 hours, the trading volume for XRP futures reached about $6.4 billion compared to $1.2 billion on the spot market, with OI at $3.45 billion. According to CoinGlass, on Binance, there are approximately two long positions for each short position per account, with the ratio among the largest traders approaching three to one.
Long and short position ratio for XRP on Binance. Data: CoinGlass.On August 26, XRP dropped nearly 5% to $1.44. With long positions prevailing, any further decline raises the likelihood of forced liquidations, potentially exacerbating the correction.
Daily chart of XRP/USDT on Binance. Source: TradingView.Previously, analysts at BlackRock maintained a positive assessment of Bitcoin's role in investment portfolios after it fell more than 50% from its October peak. They attributed the sell-off to deleveraging and capital reallocation rather than a fundamental change in the investment case for the leading cryptocurrency.
It is worth noting that in August, CryptoQuant experts concluded that digital gold may be nearing the end of its bearish phase, as on-chain metrics show the first signs of a revival in spot demand.