Bitcoin Open Interest Drops, But a New Bullish Trend May Emerge

Bitcoin's open interest has significantly decreased as the cryptocurrency's price has fallen recently. An analyst suggests this might indicate a potential bottom for Bitcoin, leading to a possible recovery in bullish trends. As traders adjust their strategies in response to the market's volatility, the future could hold opportunities for a price revival.

Key Takeaways

Bitcoin's open interest has experienced its most significant drop in 30 days, totaling around 1.3 million BTC, equivalent to $114 billion.
The price of Bitcoin has fallen by roughly 20% in the last month and over 30% since its peak in early October.
Analyst Michaël van de Poppe believes that staying above $90,000 may pave the way for Bitcoin to reach a new all-time high.

Bitcoin open interest dives, but bottom could see ‘renewed bullish trend’

Bitcoin's Current Market Situation

Bitcoin's open interest has seen a dramatic decline as its price has decreased over the past month. Analyst "Darkfost," posting on CryptoQuant, noted that this drop represents the “sharpest 30-day decline of the cycle,” with approximately 1.3 million BTC currently valued at $114 billion, given Bitcoin’s trading price of $87,500.

The recent drop in Bitcoin's price has resulted in a series of liquidations, prompting traders either to deepen their positions or alter their strategies. However, it appears that many investors are now pulling back on futures trading to mitigate risk exposure.

Darkfost pointed out that the last time there was such a rapid reduction in Bitcoin's open interest within 30 days was during the bear market of 2022, emphasizing the significance of the current market corrections.

Open Interest 30 day change. Source: CryptoQuant

Potential for a Bull Market Revival Above $90,000

Crypto analyst Michaël van de Poppe, founder of MN Fund, suggested that the coming week will be crucial for Bitcoin's price movements and its chances of reaching a new all-time high (ATH) soon.

In a post on X, van de Poppe mentioned that if Bitcoin can recover and maintain a price range between $90,000 and $96,000, the likelihood of a revival towards a new ATH would significantly increase.

He noted, “Fear and panic are at their peak these past days, and these conditions often present the best market opportunities.”

Related: Bitcoin volatility surge may indicate a return to option-driven prices, according to analysts.

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