TLDR:

• Ethereum open interest in ETH terms fell from 7.79M to 5.8M across all major derivatives exchanges.
  
• Binance notional open interest dropped from $12.6B to $4.1B, yet still holds nearly 35% of total market share.
  
• Core PPI rose 0.8% month-over-month, reducing Federal Reserve rate cut expectations and pressuring risk assets.
  
• Bybit and Gate.io both recorded steep open interest declines, confirming a broad market-wide deleveraging phase.
  

The Ethereum derivatives market is experiencing a sharp contraction as macroeconomic pressures weigh on crypto assets.

Core PPI data rose 0.8% month-over-month, confirming that inflation remains persistent. This reading has reduced expectations for a near-term Federal Reserve rate cut.

Meanwhile, rising U.S.-Iran tensions over the weekend added further uncertainty. Together, these factors pushed traders toward risk aversion, triggering a broad deleveraging across Ethereum’s futures and derivatives segment.

Open Interest Drops Sharply Across Major Exchanges

The Ethereum derivatives market saw open interest in ETH terms fall from 7.79 million to 5.8 million across all exchanges. That represents a reduction of nearly 2 million contracts across the board.

Binance alone concentrated roughly 2 million of the affected positions. The contraction reflects a clear pullback from leveraged exposure across the market.

Binance remains the dominant player despite the notable decline, holding close to 35% of total open interest. Its notional open interest, however, dropped sharply from $12.6 billion to $4.1 billion.

This decline factors in both reduced contract volumes and falling ETH prices. Even after the drop, Binance’s share remains well ahead of all competitors.

Bybit, which holds roughly 15% of total open interest, saw its figures fall to $1.9 billion. That marks approximately a threefold reduction from its prior recorded levels.

Gate.io also declined, dropping from $5.2 billion to $2.75 billion. Gate.io now accounts for approximately 23% of the overall Ethereum derivatives market.

Analyst Darkfost noted the wide scope of this deleveraging phase across platforms. The data reflects active leverage unwinding rather than a routine price correction.

Traders across exchanges are steadily reducing exposure amid unfavorable macro conditions. The speed of this contraction points to deliberate risk management decisions by market participants.

Macro Pressures Drive Risk Aversion Across Crypto Markets

The Federal Reserve’s rate cut prospects have dimmed following the latest inflation data. Core PPI rising 0.8% month-over-month confirmed that price pressures have not eased.

Markets are now pricing in a prolonged period of restrictive monetary policy. This environment tends to reduce appetite for risk assets, including cryptocurrencies.

Altcoins have been among the first to absorb the pressure as risk sentiment shifted. Ethereum led the decline among major digital assets during this period.

The derivatives market responded accordingly, with leveraged positions being quickly reduced. Reduced leverage typically reflects a move by traders toward greater caution.

Geopolitical developments added further pressure on already fragile market conditions. Growing tensions between the United States and Iran surfaced over the weekend.

These events increased uncertainty at a time when investors already lacked clear direction. Risk assets, including crypto, tend to react quickly to such external geopolitical shocks.

The Ethereum derivatives market is now in a clear contraction phase across all major platforms. Traders have broadly pulled back from leveraged positions as conditions tightened.

The combination of macro headwinds and geopolitical risks has created a structurally unfavorable environment. Until conditions stabilize, the derivatives market may continue facing continued downward pressure.

Crypto hacks and exploits resulted in approximately $37.7 million in losses during February 2026 and were the lowest monthly figure since March 2025 according to Certik data.

Phishing attacks accounted for $8.6 million of the total, while wallet compromise led incident categories with $16.6 million in losses.

YieldBlox topped individual exploits with $10.6 million stolen, followed by IoTeX at $8.9 million and Foom at $2.3 million.

DeFi protocols suffered the largest losses by type at $14.4 million, while AI-related projects recorded $8.9 million in thefts.

Funds returned or frozen reached $11.3 million, representing approximately 30% of total losses.

Wallet compromise and price manipulation drive February losses

Wallet compromise incidents totaled $16.6 million across February and were the largest crypto hacks loss category.

Price manipulation attacks followed with $11.4 million in stolen funds, while phishing schemes drained $8.6 million from victims.

Code vulnerability exploits accounted for $5.1 million, with exit scams adding $2.1 million.

Instadapp posted the largest single incident at $10.5 million, followed by EFX at $8.9 million. Kasm recorded $2.2 million in losses, while Initia saw $2.1 million stolen.

CryptoFarm experienced two separate incidents totaling $2.7 million combined.

Smaller incidents included UCC and Hedgehog at $400,000 each, with Lending and SEI Token both posting $200,000 in losses.

DeFi protocols continued to see the highest exploit activity with $14.4 million in losses across multiple incidents.

AI-related projects emerged as the second-largest target with $8.9 million stolen. Gambling platforms lost $2.3 million, while address poisoning and wallet drainer schemes combined for $2.7 million.

February shows 60% crypto hack drop from January

The $37.7 million February total is a sharp drop from typical monthly figures seen throughout 2025.

Certik data shows January and February 2026 both posted lower losses than most 2025 months.

Total incidents remained relatively stable month-over-month based on the chart. The reduction in total losses comes from fewer high-value exploits rather than decreased attack frequency.

Phishing incidents showed similar patterns across both months, with February’s $8.6 million matching January levels.

Exploit total loss also dropped from January’s elevated levels to February’s $37.7 million.

Cardano’s price has entered a tight consolidation phase over the past several days. ADA is trading within a narrowing range as momentum weakens. Repeated attempts to break higher have stalled, reflecting broader caution in the crypto market.

Bearish signals dominate the short-term outlook. However, one key cohort of holders is providing support.

Cardano Is Under Pressure

The Money Flow Index shows persistent selling pressure on ADA. The indicator remains below the neutral 50 level, signaling sustained capital outflows. Weak inflows suggest that buyers are hesitant to step in at current prices.

A shift in momentum requires reclaiming the 50 mark or entering oversold territory. At present, ADA is far from both conditions. Without a strong reversal signal, selling pressure may continue to weigh on Cardano price action.

Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

Derivatives data reinforces the bearish narrative. The liquidation map indicates that Cardano futures contracts are skewed toward short positions. Exposure on short contracts stands near $23 million compared with $14 million in potential long liquidations.

This imbalance highlights trader expectations for further downside. Elevated short interest can increase volatility if the price moves sharply. However, current positioning suggests that many traders anticipate continued weakness rather than a breakout.

Sustained bearish positioning may amplify price swings. If ADA attempts a recovery, short liquidations could accelerate upside. Conversely, additional selling could reinforce negative momentum. For now, macro sentiment in futures markets remains defensive.

ADA LTHs Provide Relief

Long-term holders are currently offsetting part of the sell pressure. The Mean Coin Age metric is rising, indicating that older coins are remaining inactive. This trend suggests that LTHs are choosing to hold rather than distribute.

Resilience among long-term investors is crucial. Persistent holding behavior reduces circulating supply pressure. While it does not guarantee recovery, it helps ADA defend critical support levels during periods of uncertainty.

ADA Price Needs To Hold Above This Support

Cardano is trading at $0.264 at the time of writing, rangebound between $0.295 resistance and $0.256 support. The lower boundary aligns with the 13.6% Fibonacci retracement, often referred to as the bear market support floor. ADA has maintained this level for nearly three weeks.

Given current indicators, consolidation appears likely to continue. A successful defense of $0.256 could enable a rebound toward $0.278. Sustained buying may push ADA back to $0.295, testing upper range resistance once again.

However, increased selling pressure would shift the outlook. A decisive breakdown below $0.256 would weaken structural support. In that scenario, Cardano price could decline toward $0.239, invalidating the short-term bullish thesis and reinforcing bearish control.

The CEO of AI company Anthropic, Dario Amodei, has responded to the United States Department of Defense and the White House, ordering military defense contractors that do business with the Department of Defense to stop using Anthropic’s products.

Anthropic objected to the use of its AI models for mass domestic surveillance and fully autonomous weapons that can fire without any human input, Amodei told CBS on Saturday. 

He added that Anthropic was fine with all of the US government’s proposed use cases for its AI models, except for surveillance and fully autonomous weapons platforms. He said:

“These are things that are fundamental to Americans: the right, not to be spied on by the government, the right for our military officers to make decisions about war, themselves, and not turn it over completely to a machine.” 

The decision by the Defense Department to label Anthropic as a “supply chain risk,” meaning that military contractors cannot use Anthropic’s products on defense contracting work, is “unprecedented” and “punitive,” he added.

Amodei later clarified that he is not against the development of fully automated weapons if foreign militaries begin using them in the future, but that AI is not yet reliable enough to function autonomously in a military setting.

The law has not caught up to the rapidly developing AI sector, Amodei said, calling on the United States Congress to pass “guardrails” to prevent the use of AI in domestic mass surveillance programs.

Related: Anthropic says it’s been targeted in massive distillation attacks

OpenAI wins a defense contract after US officials label Anthropic a supply chain risk

On Friday, US “Secretary of War” Pete Hegseth announced that Anthropic is a “Supply-Chain Risk to National Security.”

“Effective immediately, no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic,” he said. 

Hours later, rival AI company OpenAI accepted a contract with the US Defense Department to deploy its AI models across military networks. 

The announcement of the deal from OpenAI CEO Sam Altman drew online backlash from critics, who cited AI being used for mass domestic surveillance and undermining individual privacy as a red line.  

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