Bitcoin Open Interest plunges 43% to $24.5 billion since Ath

Open interest in Bitcoin has fallen by 35% from its all-time high, indicating less hedging and speculative trading.

Open interest, which represents the total number of outstanding derivative contracts, tracks the market. This indicates that market movers are trading off uncertainty or unwinding leverage.

The digital asset is now attempting to regain momentum after recent selling pressure. Although Bitcoin reached an all-time high of over $109,000 in January, it has struggled to reclaim the $90,000 level.

Bitcoin Struggles to Reclaim Key Price Levels

Bitcoin has been attempting to break the $90,000 resistance level for the past two weeks. This follows its failure to sustain the upside after reaching the all-time high.

This led to a downward pullback for BTC, sparking speculation about whether the recent bull run was complete or if a second rally could see it higher than ever before.

According to on-chain data provider GlassNode, this is clearly happening as a general trend in on-chain liquidity is declining.

The unwinding of long-side cash and slack trading, where traders make money from the difference between spot and futures prices, has also contributed to the downward pressure.

In addition, Bitcoin exchange-traded funds (ETFs) are under pressure and have recorded outflows, while some CME futures contracts are expiring, further depressing the price of Bitcoin.

Another notable shift is the decline in BTC’s “hot supply”—the Co-KINs held for a week or less. Over the past three months, hot supply has dropped from 5.9% of Bitcoin’s circulating supply to just 2.8%, a drop of more than 50%. This suggests that fewer newly acquired Bitcoins are being actively traded, reducing market liquidity.

Bitcoin exchange inflows are also matic, rising from 58,600 BTC/day to 26,900 BTC/day—a drop of 54%. While this may signal less selling pressure, it also means weaker demand, as fewer coins are being sent to exchanges to be traded.

Bitcoin Prepares to Test Key Support Levels

BTC is currently trading at $84,001 and holding above the key support level of $85,000. Industry analyst “Unknown Trader” emphasized that Bitcoin’s uptrend is only intact above this level and that BTC has only recently closed.

Furthermore, the asset remains above the 200-day moving average, a historically bullish indicator of long-term price momentum.

BTC is back on track to retest around $85,000. If it rises, analysts expect a move to the resistance zone of $90,500–$92,441. However, this solid rejection level could reinvigorate a downward trend until another retest of $85,000 is achieved.

Cryptoquant analyst Woominkyu, for his part, reported on potential institutional accumulation. He pointed out how the 30-day EMA of the Coinbase Premium Index is struggling to cross above the 100-day EMA.

This crossover typically occurs before BTC price rallies. Therefore, institutional players may be accumulating Bitcoin. As institutional demand continues to pour in, the price of BTC could still rise, extending this bull market rather than signaling its top.