Bitcoin Open Interest Drops 31%: Analysts Predict Market Bottom and Eye $105k Breakout

Bitcoin's open interest has decreased significantly, dropping over 31% from its peak in 2025. Currently, it is stabilizing around $10 billion as analysts perceive this decline as a critical bottoming phase that could push BTC towards a breakout at $105,000.

Key Takeaways

Bitcoin open interest has fallen by 31%, settling around $10 billion.
Analysts see this decline as a foundational bottom indicating a future BTC rally towards $105,000.
Recent market activity shows a surge in trading volume, with spot volumes approaching $60 billion.
The deleveraging phase represents a reset for the market, allowing for potential bullish recovery.
Futures market positioning indicates a shift, with positive signs for future price movements.
Bitcoin must maintain momentum above $94,000 to approach resistance at $105,000, which could lead to new all-time highs.

Bitcoin Open Interest Drops 31% as Analysts Call a Market Bottom and Eye $105k Breakout

The recent deleveraging phase, attributed to massive liquidations, has pulled open interest below its 180-day moving average, while trading activity remains strong, with spot volumes nearing $60 billion.

According to on-chain analysis from Darkorst, the year 2025 has been characterized by unprecedented speculation, highlighted by Binance futures trading volumes surpassing $25 trillion.

Bitcoin’s open interest reached an all-time high over $15 billion on October 6, nearly tripling from the $5.7 billion peak witnessed during the November 2021 bull market when Bitcoin hit its previous all-time high.

Market Reset Creates Foundation for Bullish Recovery

The market crash on October 10 triggered a significant deleveraging process, clearing out excessive leverage from the market.

“This decline, amplified by massive liquidations, triggered a deleveraging phase, with OI falling below its 180-day moving average,” explained Darkorst.

Bitcoin Open Interest Drops - Bitcoin Deleveraging Signal

These deleveraging phases play a crucial role in the market's structure. “Historically, they have often marked significant bottoms, effectively resetting the market and creating a stronger base for a potential bullish recovery,” Darkorst noted.

Bitcoin has shown a positive response with a 3% rally over the last 24 hours, consistently holding above $95,000 while demonstrating renewed strength in both futures and spot markets. This price action suggests that the worst phase of the correction may be behind us.

Futures Positioning Signals First Major Shift Since October Peak

Macro analyst Axel has identified an essential turning point in futures market positioning.

A composite index that tracks open interest dynamics, funding rates, and long-short ratios across major exchanges shows the 30-day simple moving average rising from 2.1 to 3.5, marking the first breakout above 3 since October 6, when Bitcoin surged towards $125,000.

The daily positioning index has increased to 24, entering bullish territory amid aggressive long accumulation.

Bitcoin Open Interest Drops - Bitcoin Positioning Index Chart

Overall open interest rose by 1.89% with positive taker delta and funding rate at 0.0045, as the price climbed 4.58% to $95,358, raising total open interest to $12.18 billion.

Market sentiment peaked locally at 93.15% yesterday evening at $95,061 before cooling to 70%, remaining well above the neutral 50% threshold and exceeding the 30-day average of 62.9%. This stands in stark contrast to the extreme bearish sentiment of 10-15% seen in mid-December during the correction to $85,000, when market positioning was overwhelmingly negative.

Resistance Cluster at $105k Holds Key to ATH Attempt

Axel emphasized that to maintain the upward momentum, the simple moving average must stay above 2 for one week, which would confirm the positioning shift and trigger a potential breakout above the psychological barrier of $100,000.

Crypto analyst Trader Mayne evaluated the chances of a bullish recovery following Bitcoin's breakout past the two-month resistance at $94,000. “If I had to handicap it, I’d say 70% chance of a lower high, 30% chance at new ATHs,” he stated.

However, he pointed out a clear path to follow if the bulls continue to hold their position.

Remaining above $94,000 would bring the next resistance cluster to around $105,000 into play, with a successful breach potentially driving Bitcoin back towards the $120,000 range established earlier in the cycle.

Low Volatility Environment Points Toward Range Expansion

The Bitcoin Realized Volatility chart indicates that current market calm is approaching levels that have historically preceded significant price breakouts.

Current volatility readings are nearing the lower distribution zones for this market cycle, similar to compression periods that led to major moves in Bitcoin's trading history.

Bitcoin Open Interest Drops - Bitcoin Realized Volatility

Historically, these compressed markets do not last for extended periods. As supply-demand imbalances accumulate beneath the surface, markets typically break from consolidations and enter a range expansion phase, aligning with analysts' projections for a $105,000 breakout, which could catalyze a robust start to the 2026 rally.