Bitcoin Derivatives Might Not Fully Recover From October Crash Until Q2

It could take two quarters for Bitcoin derivatives activity to recover from the Oct. 10 flash crash that wiped out $19 billion in open interest, Max Xu, Bybit’s derivatives operations director, told Decrypt. 

“While I don’t expect a rapid rebound, the medium-term outlook remains constructive,” he said of the correction that ranks among the largest ever for Bitcoin derivatives. “If macro conditions turn more favorable—for example, rate-cut expectations materialize and market sentiment improves—open interest could gradually return to pre-shock levels by Q1 or Q2 2026.”

At the time of writing, Bitcoin was changing hands at $100,800 after having dropped 0.8% in the past day. The world’s first and largest cryptocurrency by market capitalization is now 10.5% lower than it was a month ago, according to crypto price aggregator CoinGecko.

Bitcoin open interest in futures, options, and perpetual contracts now sits around $140 billion, down from $220 billion right before the Oct. 10 crash. Derivatives volumes spiked to $748 billion the day of the big wipeout, but has maintained its usual level around $300 billion for the past week according to CoinGlass.

Data on Deribit, the world’s largest crypto derivatives exchange, shows that there’s a $1.1 billion cluster of bullish call contracts at the $140,000 strike price and another $887 million cluster at the $200,000 strike price in options contracts set to expire Dec. 26. There are still plenty of pessimists, though. There’s a $1.1 billion cluster at the $85,000 price. 

The overall reduction in open interest will mean the last monthly expiry of the year could be relatively quiet, Xu said.

“That means we’re likely heading into a year-end expiry with lighter positioning and reduced mechanical pressure, which should help stabilize the market compared with previous high-leverage periods,” he said. “However, activity will likely cluster around key strike levels, and any renewed volatility or ETF-related flows could still drive short-term dislocations. Overall, it’s a healthier setup for the derivatives market heading into 2026.”