Bitcoin Open Interest Decline May Indicate Bullish Rebound
Bitcoin Open Interest Decline: A Potential Bullish Signal
Recent market trends show a notable decrease in Bitcoin open interest, coinciding with the cryptocurrency's declining price over the past month. An analyst suggests this could signify a market bottom, potentially leading to a bullish trend.
Bitcoin (BTC) open interest has experienced its most significant 30-day reduction of this cycle, currently valued at $114 billion with BTC trading at $87,500, as reported by analyst "Darkfost" on CryptoQuant.
As Bitcoin's price continues to fall, causing further liquidations, traders are reassessing their strategies and reducing futures trading to mitigate risk.
"Historically, these cleansing phases have been crucial in forming a solid market bottom and paving the way for a bullish trend. The process of deleveraging and reducing speculative exposure aids in market stabilization," the analyst noted.
The last comparable decline in open interest was during the 2022 bear market, underscoring the current market correction's significance.
Potential Bull Market with Bitcoin Above $90,000
Crypto analyst and MN Fund founder Michaël van de Poppe emphasizes this week as crucial for BTC's price trajectory. If Bitcoin can sustain a position between $90,000 and $96,000, the likelihood of reaching a new all-time high increases.
He remarked on the opportunity presented by recent market fear, suggesting it as a prime time for market entry.