Bitcoin Open Interest Drops 3.5% – More Pain Ahead?

Bitcoin has remained above the critical $100,000 level since early June, suggesting that the market may be establishing a new price equilibrium. Despite holding this psychological threshold, the bullish momentum has stalled as BTC struggles to break above its all-time high near $112,000. This consolidation phase is marked by indecision, with traders weighing macroeconomic uncertainty, global conflict, and the fading post-halving hype.

Data from CryptoQuant provides deeper context into market dynamics, particularly in the derivatives sector. According to the firm, previous deep drawdowns in open interest (OI) — between 20% and 25% — typically accompanied local price corrections of 7% to 21% throughout 2024 and 2025. These sharp drops in OI often signal broad market repositioning or liquidation events that trigger downside volatility.

Currently, the OI change stands at –3.5%, indicating only a moderate outflow of leveraged positions. While this does not raise immediate red flags, it does highlight cautious sentiment among futures traders. The muted drop in OI suggests that investors are trimming exposure but not exiting the market entirely — a sign that the current range-bound price action could persist until a more decisive catalyst emerges.

Bitcoin Momentum Wanes As Open Interest Hints At Potential Risk

Bitcoin is currently trading 6% below its all-time high of $112,000, showing impressive resilience amid global uncertainty but lacking the momentum needed to enter full price discovery. The market has held relatively stable above the $100,000 level, yet the inability to push higher reflects hesitation from both institutional and retail investors. Macro headwinds — including rising US Treasury yields, the Federal Reserve’s decision to hold interest rates, and escalating tensions in the Middle East — continue to influence risk sentiment and stall bullish continuation.

According to top analyst Axel Adler, futures market data is beginning to signal cautious repositioning. In the 2024–2025 cycle, deep drawdowns in open interest (OI) between –20% and –25% consistently coincided with local Bitcoin corrections ranging from 7% to 21%. While current OI sits at just –3.5%, suggesting only a moderate reduction in positions, any repeat of the historical pattern could imply a potential BTC price correction of 5–15%.

With BTC stuck between major resistance at $112K and key support near $103K, traders are watching derivatives activity closely. For now, the market remains balanced — but not immune to a sharp move if pressure builds.

BTC Price Holds Tight Between Key Levels As Market Awaits Breakout

Bitcoin is currently trading around $105,910, following a modest bounce within a tight consolidation range. This 3-day chart shows BTC caught between the $109,300 resistance zone and the $103,600 support level, which has now been tested multiple times since early June. Despite a slight uptick in volume, price action remains largely indecisive, reflecting market caution.

The chart also highlights the significance of the 50-day (blue), 100-day (green), and 200-day (red) simple moving averages. All three trend indicators are sloping upward, with price consistently holding above them — a bullish structural signal. Notably, the 50-day SMA is currently acting as dynamic support near the $100K–$102K range.

As long as BTC remains within this range, traders will look for a breakout above $109,300 to signal renewed bullish momentum and a potential push into price discovery. On the downside, a breakdown below $103,600 could open the door for a retest of the $95K–$98K region, where the 100-day SMA currently aligns.

Featured image from Dall-E, chart from TradingView

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

Sebastian’s journey into the world of crypto began four years ago, driven by a fascination with the potential of blockchain technology to revolutionize financial systems. His initial exploration focused on understanding the intricacies of various crypto projects, particularly those focused on building innovative financial solutions. Through countless hours of research and learning, Sebastian developed a deep understanding of the underlying technologies, market dynamics, and potential applications of cryptocurrencies. As his knowledge grew, Sebastian felt compelled to share his insights with others. He began actively contributing to online discussions on platforms like X and LinkedIn, focusing on fintech and crypto-related content. His goal was to expose valuable trends and insights to a wider audience, fostering a deeper understanding of the rapidly evolving crypto landscape. Sebastian’s contributions quickly gained recognition, and he became a trusted voice in the online crypto community. To further enhance his expertise, Sebastian pursued a UC Berkeley Fintech: Frameworks, Applications, and Strategies certification. This rigorous program equipped him with valuable skills and knowledge regarding Financial Technology, bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi). The certification deepened his understanding of the broader financial landscape and its intersection with blockchain technology. Sebastian’s passion for finance and writing is evident in his work. He enjoys delving into financial research, analyzing market trends, and exploring the latest developments in the crypto space. In his spare time, Sebastian can often be found immersed in charts, studying 10-K forms, or engaging in thought-provoking discussions about the future of finance. Sebastian’s journey as a crypto analyst and investor has been marked by a relentless pursuit of knowledge and a dedication to sharing his insights. His ability to navigate the complex world of crypto, combined with his passion for financial research and communication, makes him a valuable asset to the industry. As the crypto landscape continues to evolve, Sebastian remains at the forefront, providing valuable insights and contributing to the growth of this revolutionary technology.