Bitcoin rises 35% since August low while open interest drops 20%, Glassnode reports

Bitcoin has climbed 35% since its August low, and the derivatives market hasn't kept up. According to Glassnode, BTC-denominated open interest has fallen nearly 20% to levels not seen since March, creating an unusual dynamic where price goes up and leverage comes down.Open interest, which measures the total value of outstanding futures and perpetual contracts, contracted sharply over the past two months, dropping to its lowest reading since March. The decline accelerated after a record short liquidation event on August 19, when 85% of all liquidations came from traders betting against Bitcoin.Open interest contracted 11% in coin-denominated terms in the immediate aftermath, clearing out a significant chunk of leveraged positioning. Bitcoin rose roughly 26% from its mid-August lows during the initial leg of the recovery. The broader move since the August bottom now totals 35%, with Bitcoin trading in the $83,000 to $84,000 range in late September.Glassnode describes this rally as part of a maturing market structure, where price momentum is increasingly driven by spot buying and inflows from Bitcoin ETFs rather than fresh derivatives positioning. US spot Bitcoin ETFs recorded $2.23 billion in inflows during the strongest seven-day period in August.Glassnode's on-chain data identifies a significant supply cluster between $84,000 and $86,000, composed primarily of coins held by long-term holders. Bitcoin has been testing the lower edge of this zone, trading consistently near $83,000 to $84,000 in late September.