Bitcoin Open Interest Drops Amid Price Decline
Bitcoin’s open interest has fallen sharply as its price dropped in the last month. An analyst says this could mean Bitcoin is near a bottom and may start a new bullish trend. Open interest in Bitcoin fell by about 1.3 million BTC over 30 days. This is the sharpest drop seen in the current cycle. At the time, Bitcoin was trading near $87,500, making the open interest worth $114 billion.
The recent price slide has caused many liquidations, forcing traders to change their strategies. Now, investors seem to be stepping back from futures trading to lower their risks.
“Historically, these cleansing phases have often been essential to forming a solid bottom and setting the stage for a renewed bullish trend. Deleveraging, forced closures of overly optimistic positions and a gradual decline in speculative exposure help rebalance the market.”
— Analyst Darkfost
Darkfost noted that the last time open interest dropped this fast was during the 2022 bear market. This shows the current market cleanup is very significant. Bitcoin has fallen 20% in the past month and dropped over 30% since peaking above $126,000 in early October.
Price Recovery Above $90,000 Could Signal Bull Market Return
Michaël van de Poppe, a crypto analyst and MN Fund founder, said this week will be key for Bitcoin’s price. He believes the chance of a new all-time high depends on BTC’s ability to rise again.
On Sunday, van de Poppe wrote on X that if Bitcoin moves back above $90,000 and stays below $96,000, its chances to reach a new all-time high will improve significantly.
He added that recent fear and panic in the market create some of the best trading opportunities.
