Bitcoin Is Headed For Its Best Quarter In Nearly 2 Years – But Traders Are Using Less Leverage

Bitcoin is heading into Q4 after one of its strongest quarters in years, but the structure of the rally may matter as much as the gain.

• With a 41.88% increase in Q3, Bitcoin is expected to have its greatest quarter since Q4 2024.
• With Bitcoin open interest down about 20% since August, the rally is operating with less leverage.
• Last week, $2.4 billion was invested in U.S. spot Bitcoin ETFs, the highest amount since October 2025.

Bitcoin (BTC) is heading toward its strongest quarter since late 2024, but the rally's structure may be as notable as its size.

BTC is up about 42% in the third quarter, according to CoinGlass data -- putting it on track for its best quarterly performance since Q4 2024, when it rose 47%. At the same time, Bitcoin open interest has fallen roughly 20% from earlier September levels, suggesting traders have been reducing leveraged exposure even as prices climbed. 

It would also be Bitcoin’s second-best third quarter on record, behind a gain of 80.41% in 2017, CoinGlass data showed. 

Bitcoin Open Interest Falls 

Bitcoin's rally has coincided with a fall in derivatives positioning rather than an increase in leverage, even as BTC prices rose.

Data from Santiment showed total open interest for Bitcoin declined to about $21.14 billion on Wednesday. That's down from more than $25 billion earlier this month. Bitcoin’s slump in open interest came as it traded near recent highs.

Bitcoin rose 35% from its August low, while coin-denominated open interest fell nearly 20%, Glassnode said in a post on X. The analytics firm said open interest was at its lowest level since March. Glassnode explained further that this could make the rally less exposed to leverage flushes.

Spot Bitcoin ETF Buyers Return

The demand from buyers of spot ETFs has filled the gap. U.S. spot Bitcoin ETFs saw an inflow of $2.4 billion in the week ending Sept. 25, data from SoSoValue showed. It was their best week since October 2025. The inflows turned the funds’ 2026 flows positive. SoSoValue now estimates them at about $934.1 million for the year. As of July 13 the funds were down about $5.8 billion.

Institutional Crypto Allocation Could Be The Next Catalyst

The combination of stronger spot ETF demand and lower open interest has shifted attention toward whether fresh institutional allocation can extend the move into Q4. Fundstrat’s Tom Lee said Wednesday that the majority of institutional investors still don’t own crypto. "Only around 2% of institutions in Fundstrat's universe have an allocation," he stated. “I think you’ll see a big rotation in the fourth quarter,” Lee said in an interview at Korea Blockchain Week.

BTC: Retail Sentiment 

Bitcoin’s price was trading around $83,777, down 0.4% in the last 24 hours. On Stocktwits, retail sentiment around BTC remained in the ‘bearish’ zone while chatter dropped to ‘low’ from ‘normal’ levels over the past day. 

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