Leverage crypto down 50% since October 2025: a less speculative market?

The perpetual contracts (perps) and crypto leverage market is recovering from the crash in October 2025, marked by massive liquidations and a drastic drop in open interest. According to the State of Crypto Perpetuals 2026 report by CoinGecko, global open interest fell from $210 billion in October 2025 to $99.09 billion in April 2026, a 53% decline. This trend reflects reduced speculation and better risk management by traders, but also a waning interest in derivative products after years of extreme volatility. What Happened The available data shows a significant decline in key market indicators for perps. Open interest dropped by 53% in seven months, while the average daily volume decreased by 40%, falling from $15 billion in 2025 to $9 billion in 2026. The massive liquidations in October 2025 affected over 10,000 traders, resulting in estimated losses of $2.3 billion in 24 hours. Additionally, the TVL (Total Value Locked) of leverage protocols like GMX or dYdX dropped by 60%, from $8 billion to $3.2 billion. Hyperliquid (HYPE), a decentralized trading protocol on Solana, has a market capitalization of $10.49 billion and a daily trading volume of $1.2 billion. However, its score of 43/100, according to Bitwise, and the concentration of liquidity (the top 10 holders control 82.3% of the supply) raise questions about its resilience. Why It Matters The reduction in leverage limits extreme price movements and reduces crypto market volatility. However, it also reduces liquidity for large orders, making the market less attractive to institutional investors. Decentralized protocols like Hyperliquid could benefit from a recovery if trust returns, but their position remains fragile against the dominance of centralized platforms (Binance, Bybit), which capture 80% of the perps market. Macroeconomically, a decline in speculation could favor fundamental assets like Bitcoin or Ethereum. Conversely, it may also slow innovation in derivative products, a key segment for the DeFi ecosystem. Regulators, particularly in Europe and the United States, are closely monitoring these instruments, which could impose additional restrictions and limit their growth. What to Watch The release of CoinGecko’s next quarterly report, which could confirm stabilization of leverage and reignite interest in derivative products. The evolution of HYPE’s price: an improvement in its score or an increase in liquidity could strengthen its position in the decentralized perps market. Regulatory announcements in major jurisdictions, which could influence access to and use of derivative products. Traders' reaction to a potential bullish market recovery, which could lead to a renewed increase in leverage and risks of massive liquidations. The ability of decentralized protocols to attract more liquidity in the face of competition from centralized platforms.