Bitcoin Price Surges Past $86K, Highlights Rare Bullish Reset in Open Interest

Bitcoin's price is showing signs of recovery, trading around $86,646 with a noticeable spike in trading activity. A significant drop in open interest indicates potential for a price reversal, although caution remains among traders. Recent market data suggests a gradual return to bullish sentiment.

Key Takeaways

Bitcoin is currently priced at approximately $86,646, up 0.6% in the past 24 hours.
Trading volume increased by 46% to $64.7 billion after recent heavy selling.
Open interest experienced its most significant 30-day drop, indicating a structural shift in the market.
Analysts anticipate Bitcoin could recover to $99,000 to $105,000, but with cautious sentiment and potential resistance at $100,000.
Technical analysis reveals a downward trend, with support around $80,000 and resistance near $90,000 and the psychological $100,000 level.

Chart showing Bitcoin price on the uptrend

Bitcoin Price Insights

Bitcoin's price may be positioned for a rebound following a period of heavy leverage liquidation. Currently, Bitcoin is trading at approximately $86,646, reflecting a 0.6% increase over the last day. The daily trading range has varied between $85,483 and $87,995. Despite this uptick, Bitcoin is down 10% over the past week, having experienced a 31% drop from its all-time high of $126,080 reached on October 6.

The trading volume surged to $64.7 billion in the last 24 hours, marking a 46% rise amid a brief resurgence in market activity after extensive sell-offs. CoinGlass data also indicates a 35% increase in derivatives volume, reaching $93 billion, alongside a slight increase of 0.64% in open interest. Such increases in volume accompanied by a rise in open interest often suggest that traders may be re-entering the market following a series of liquidations, although overall market positioning remains cautious.

Analyzing Open Interest for Price Reversals

A recent analysis from CryptoQuant contributor Darkfost suggests a significant structural change in the derivatives market. He observed that Bitcoin's open interest—measured in BTC—is experiencing its most profound 30-day decrease of this market cycle, with Binance reporting a loss of approximately 1.3 million BTC in open contracts.

Darkfost highlighted that a drop of this magnitude has not been seen since the 2022 bear market, indicating that the current market cleanup is "far more meaningful than many traders realize." He noted that the market had been largely driven by leveraged positions, which peaked at an all-time high of around $47.5 billion earlier in the cycle. This ongoing cleanup is considered a necessity following a prolonged period of speculative trading.

Further analysis from another CryptoQuant analyst, gigisulivan, pointed to a decline in the short-term Spent Output Profit Ratio (SOPR) below 0.94, a reliable signal of local market bottoms this year. Oversold conditions were also noted on both three-day and daily timeframes, reflecting extreme market fear. Predictions suggest Bitcoin may recover within the $99,000 to $105,000 range before facing substantial resistance. However, analysts cautioned that rapid movements above the $100,000 mark could lead to hasty bullish projections. They anticipate that Bitcoin's price may oscillate between $78,000 and $105,000 for an extended period until a clearer market direction is established.

Technical Analysis of Bitcoin's Price Movement

Bitcoin's chart reveals a clear downward trend from late October to November, characterized by lower highs and lower lows, forming a distinct descending structure. The price remains close to the lower Bollinger Band, indicating persistent weakness rather than stable support.

Price candles currently sit below the 20-day and 50-day moving averages, both of which are trending downwards, reinforcing the ongoing bearish pressure.

Bitcoin price rises above $86K with 30-day open interest posting a rare bullish reset sign - 1

Momentum indicators present mixed signals. There's no clear sign of a reversal as the relative strength index remains deeply oversold, positioned at 29. The Stochastic indicator is low but hasn't shown a strong upward movement. An elevated average directional index suggests a strong trend that has yet to weaken sufficiently for a directional shift. Both the MACD and the awesome oscillator remain in negative territory, indicating that buyers have not regained control.

Current support is anticipated in the mid-$80,000 range. Should buyers fail to defend that area, the market may retest levels closer to $80,000. Resistance is noted near the $90,000 area, as well as at the psychologically significant $100,000 mark.