Bitcoin’s open interest has declined by 43% from its peak, reducing speculative trading and hedging activities.
The metric, which tracks the total number of outstanding derivative contracts, has dropped from $57 billion at Bitcoin’s all-time high to $24.5 billion.This shift indicates that market participants are unwinding leveraged positions amid growing uncertainty. The leading cryptocurrency is now attempting to regain strength after recent downward pressure.
Bitcoin struggles to reclaim key price Levels
Bitcoin has faced resistance at $90,000 for the past two weeks, failing to sustain its upward trajectory after hitting an all-time high above $109,000 in January. This has led to speculation whether the recent bull run has ended or if another rally could push prices even higher. On-chain data from Glassnode suggests a decline in open interest aligns with reduced on-chain liquidity.
Traders unwinding cash-and-carry positions, where they profit from spot and futures price differences, have also added to the downward pressure. Additionally, Bitcoin exchange-traded funds (ETFs) have seen capital outflows, and expiring CME futures contracts further affect the asset’s price movement.
Declining market liquidity and exchange flows
A significant drop in Bitcoin’s “Hot Supply,” which represents coins held for one week or less, has been observed. Over the past three months, this supply has fallen from 5.9% of Bitcoin’s circulating supply to 2.8%, marking a 50% reduction.
This decline suggests that newly acquired Bitcoin is being held rather than actively traded, leading to reduced liquidity. Exchange inflows have also dropped sharply from 58,600 BTC per day to 26,900 BTC per day, a 54% decrease. While lower inflows indicate reduced selling pressure, they also reflect weaker demand, as fewer coins are moving into exchanges for trading.
Bitcoin prepares to test crucial support levels
The current value of Bitcoin stands at $84,001 while successfully maintaining support of $85,000. According to analysts, keeping the price above this threshold is fundamental to continuing upward momentum. The cryptocurrency exceeds its 200-day moving average, indicating bullish signals to investors. When the cryptocurrency exceeds its current resistance, a possible Bitcoin price increase toward the $90,500–$92,441 resistance range may occur.
Repetition of rejection at the $85,000 support mark will trigger another testing operation at this resistance point. Confident market analysts point to Bitcoin accumulation by institutional investors, supported by Coinbase Premium Index data using 30-day and 100-day exponential moving averages. Bitcoin stands to maintain its upward price trajectory because ongoing institutional buying activity suggests that the market has not reached its peak yet.