Key Points
- Bitcoin’s open interest has dropped to a four-month low, indicating a decline in leveraged positions.
- Bitcoin’s price volatility and the overall crypto market have shown signs of recovery despite recent setbacks.
Bitcoin’s open interest (OI), a measure of outstanding futures or options contracts, has fallen to a four-month low.
This decline is equivalent to $49 billion, or 558,914 BTC across multiple exchanges. This is a return to the levels last observed in October 2024, according to CoinGlass data.
Declining Bitcoin Open Interest
Data reveals a downward trend in BTC OI since December, dropping from approximately 700,000 BTC valued at over $62 billion.
Binance, the second most popular platform for BTC OI trading, recorded a 12-month low on March 5.
The consistent decrease in Bitcoin’s OI suggests that spot buying has outpaced leverage-driven activity during Bitcoin’s surge to a new all-time high.
This trend may also signify that investors are shifting their strategies on Bitcoin speculation, possibly reducing positions due to volatility or acknowledging losses amid billions in liquidations over the past week.
Price Volatility and Market Recovery
Bitcoin’s price fell to as low as $78,300 in late February, a roughly 25% drop from its January peak price of $108,786. This decrease was due to a combination of macro uncertainty and cyclical bottoming patterns affecting the crypto markets.
A brief boost to the digital asset sector was provided by President Donald Trump’s hint at a multi-asset crypto reserve, which would include Bitcoin. However, this was followed by another selloff.
Despite this, Bitcoin and the broader crypto market have shown signs of recovery. The total digital asset market capitalization has settled above $3 trillion, with Bitcoin reaching $90,000.
Analysts predict further price fluctuations as volatility continues this month and as trade wars fueled by tariffs persist. This prediction is supported by seasonal patterns from the Bitcoin Volmex Implied Volatility 30 Day Index.
According to the index, volatility may increase in March and decrease by April, potentially stabilizing Bitcoin prices and easing sell pressure.