Open interest in Bitcoin has dropped 35% from its all-time high, indicating reduced hedging and speculative activity.
Open interest, which tracks the total number of outstanding derivative contracts at any time, declined from $57 billion when BTC hit its ATH to $24.5 billion today. This suggests that market participants are reducing uncertainty or unwinding leverage.
The digital asset is now striving to regain momentum after experiencing recent selling pressure. Despite reaching an ATH of over $109,000 in January, Bitcoin has struggled to reclaim the $90,000 threshold.
Bitcoin Struggles to Regain Important Price Levels
Bitcoin has been attempting to break above the $90,000 resistance level for the last two weeks, following its inability to maintain upward momentum after achieving its all-time high.
This situation has put downward pressure on BTC, raising questions about whether the most recent bull run has concluded or if a second rally could push it higher.
According to on-chain data provider Glassnode, the decline in open interest occurs alongside a general trend of decreasing on-chain liquidity.
The unwinding of long-side bias from cash-and-carry trades, where traders profit from the difference between spot and futures prices, has also added to the downward pressure.
Additionally, Bitcoin exchange-traded funds (ETFs) are experiencing outflows, and some CME futures contracts are nearing expiration, further impacting Bitcoin’s price.
Another significant change is the reduction in BTC’s “Hot Supply,” which represents coins held for one week or less. Over the past three months, this metric has dropped from 5.9% of Bitcoin’s circulating supply to just 2.8%, a decrease of over 50%. This indicates that fewer newly acquired Bitcoins are being actively traded, which reduces market liquidity.
Bitcoin exchange inflows have also dramatically decreased, falling from 58,600 BTC/day to 26,900 BTC/day, representing a 54% drop. While this may reduce selling pressure, it also indicates weaker demand, as fewer coins are being sent to exchanges for trading.
Bitcoin Prepares to Test Crucial Support Levels
BTC is currently trading at $84,001, maintaining above the critical support at $85,000. Industry analyst “Unknown Trader” emphasized that the Bitcoin uptrend remains intact only above this level, which BTC recently closed above.
Additionally, the asset is above the 200-day moving average, a historically bullish indicator for long-term price momentum.
BTC is poised for another test around $85,000. If it breaks through, analysts expect a rally toward the resistance zone of $90,500–$92,441. However, this rejection level may force fine-tuning back towards another retest at $85,000.
CryptoQuant analyst Woominkyu has highlighted potential institutional accumulation, noting that the 30-day EMA of the Coinbase Premium Index is struggling to surpass the 100-day EMA.
This crossover typically precedes BTC price rallies, suggesting institutional players could be accumulating Bitcoin. As institutional demand rises, BTC’s price could continue to ascend, extending the current bull market rather than indicating its end.
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