Leverage Fades as Miners Take the Stage in Bitcoin's Recovery

The rebound of Bitcoin's price toward its May highs has been driven by leverage, as derivatives play an increasingly important role in the recovery.

Binance Open Interest (OI) jumped nearly 8% within 24 hours and briefly exceeded $10 billion when Bitcoin retested $82,000, indicating that the move up was being fueled by leverage rather than just spot demand.

The increase in OI propelled Binance's overall OI dominance to 37.1%, focusing even more leverage on one exchange, which can amplify price movements via liquidations faster.

However, after Binance's OI cooled off to $9.67 billion, Bitcoin fell under $80,000, suggesting that there may have been some unwinding of excess leverage and potentially improving the rally's structure by reducing liquidation risk.