Bitcoin open interest has dropped significantly as the cryptocurrency’s price has declined over the past month. An analyst suggests this could lead to Bitcoin hitting a bottom and sparking a renewed bullish trend.
Open interest in Bitcoin (BTC) has experienced its sharpest 30-day decline of the current cycle, falling by approximately 1.3 million BTC. This volume is currently valued at $114 billion, with Bitcoin trading at $87,500. Analyst “Darkfost” posted this observation to CryptoQuant on Sunday.
The cascading price of BTC over recent weeks continues to trigger liquidations, prompting traders to either double down on their positions or readjust their strategies. However, it now appears that investors are pausing futures trading to reduce their risk exposure.
"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."
Darkfost noted that the last time Bitcoin open interest fell so rapidly over a 30-day period was during the 2022 bear market, highlighting the significance of the current market cleanup.
Bitcoin has declined by 20% over the past month and has seen a decrease of over 30% since reaching a peak of more than $126,000 nearly two months ago in early October.
Bull Market Could Return With Climb Above $90,000
Crypto analyst and MN Fund founder Michaël Van de Poppe believes the upcoming week will be decisive for BTC's price and its chances of reaching a new all-time high in the near future.
In an X post on Sunday, Van de Poppe stated that if BTC can surge back and maintain a position between $90,000 and $96,000, then the probability of a revival toward a new all-time high will have significantly increased.
"Fear and panic are max during the past days. Those are the best opportunities in the markets," he added.