Bitcoin is near $66,000, XRP has slipped below $1, and sentiment across crypto is miserable.

Yet underneath the falling prices, one part of the market is beginning to look healthier.

Cryptoinsightuk points to a significant reduction in leveraged positioning across both Bitcoin and XRP. Open interest is falling, XRP funding has turned negative, Bitcoin funding has cooled dramatically, and spot activity is beginning to matter more as leveraged traders are forced out.

His view is not that the bottom is definitely in.

In fact, he thinks the opposite may happen first: one violent liquidation candle that clears the remaining weak positions before a stronger recovery can begin.

What you'll learn 👉

Bitcoin Open Interest Is Finally Coming Down

The Bitcoin chart shows BTC around $66,800 after weeks of deterioration from above $85,000.

At the same time, aggregate dollar-denominated open interest has dropped toward $19.5 billion from levels above $23 billion earlier in November.

That distinction matters.

When price falls but open interest remains elevated, it can mean traders are continuing to add leveraged positions into weakness, creating fuel for additional liquidations.

When both price and open interest fall together, leverage is actually being removed.

Broader market data supports that interpretation. Bitcoin open interest has continued declining during the selloff, and the November 13 move below $70,000 came alongside more than $1.6 billion in crypto liquidations across the market.

We are starting to see some signs of leverage closing and spot accumulation. We are seeing some negative funding and OI tick down as measured in dollars for bitcoin:native. ripple:native has seen a big OI bleed which is good overall. We are seeing negative funding there too now. I have this feeling (and it’s only a feeling) that we will get a liquidation candle to mark the bottom, could just be a flush and a bounce but I feel it’s coming. People are low, the bleed has been continuous for days now, volume isn’t high at all really to say what the PA has been doing, the world is full of potential catalysts right now. We haven’t seen a big shake and puke in the market since October 10th liquidation event (happened mainly on Binance) and guess what, Binance lost $6 Bill the other week. Literally just a feeling more than pure PA, but wanted to say what I see / think. Negative funding on the 4HR might mean we see a bounce on the lower time frame, but the world feels ready to shit everyone up, shake the tourists and then start a move to the upside

The process has continued today. Bitcoin has traded near $66,000, with long liquidations still heavily outweighing shorts.

XRP Has Seen an Even Bigger Leverage Reset

The XRP chart is arguably more interesting.

XRP trades around $0.995, but aggregate open interest measured in dollars has collapsed toward roughly $700 million after previously sitting well above $1 billion.

Funding has also flipped negative at around -0.0036%.

That means perpetual futures traders are now paying to remain short rather than long.

Negative funding is not automatically bullish, but it represents a very different market from one where traders are aggressively leveraged long.

If too many shorts pile in after a large decline, even a modest price recovery can force them to cover, accelerating a bounce.

XRP has also suffered nine consecutive daily losses and moved below $1 as ETF outflows and broader market weakness added pressure.

So the derivatives reset is happening after substantial damage has already been done.

Why One Final Flush Could Still Come

This is where Cryptoinsightuk’s take becomes more interesting.

He believes the market may still need a capitulation candle before a durable low forms.

That would look like a sudden drop with heavy liquidations, panic selling and a rapid expansion in volume, followed by buyers absorbing the move.

The current decline has been almost the opposite.

Price has bled lower for days, but spot volume has not consistently shown the kind of explosive capitulation often associated with major local bottoms.

That does not mean such a candle must happen.

But another fast move through obvious support could trigger exactly that kind of event.

For Bitcoin, the current $65,000-$66,000 region is critical. Losing it could put $60,000-$62,000 into focus.

For XRP, $1 has already been breached, which makes roughly $0.90-$0.95 the next obvious zone if selling accelerates.

Read also: XRP Price Warning: A Drop to $0.90 Could Delay the Next Pump by Months

The Market Is Weak, but the Leverage Structure Is Improving

There is still a serious macro problem in the background.

Bitcoin ETFs have now lost roughly $1.91 billion over seven consecutive trading sessions, showing that institutional demand has not yet returned strongly enough to offset selling.

So falling open interest should not be confused with renewed demand.

It simply means part of the excess leverage that made the decline more dangerous is being removed.

That is why I think Cryptoinsightuk’s interpretation is reasonable.

Bitcoin and XRP do not yet have confirmed bottoms. Both can still trade lower.

But a market with less leverage, negative XRP funding and shrinking open interest is healthier than one where traders keep piling into leveraged longs as price collapses.

If one final liquidation candle does arrive, the important signal will not be the drop itself.

It will be what happens immediately afterward.

A fast recovery with strong spot buying would indicate that the market finally found buyers willing to absorb forced selling. Another weak bounce followed by fresh lows would mean the reset still has further to go.

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