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Introduction #
The price of bitcoin has bounced back in recent days, but underlying market fragility persists. According to new data from CryptoQuant, the so-called open interest has dropped by about 1.3 million BTC in one month, indicating a significant reduction in risky positions. Multiple analysts see signs of a fragile market structure, despite the recovery towards $87,000.
Bitcoin: Open Interest Drops as Futures Market Cools #
Open interest, the total number of outstanding positions such as futures and options contracts, is declining. This points to a market undergoing a major cleanup of leveraged positions. According to analyst Darkfost of CryptoQuant, bitcoin is experiencing the “sharpest 30-day drop of this cycle.” He sees a potential turning point emerging in this phase. He notes that “historically, these cleanup phases are often essential to form a solid bottom.” As more futures positions are closed, room is created for a more stable price. However, this cooling stands in stark contrast to the price movements of the past month: Bitcoin is over 30% lower than the peak above $126,000 in early October. This highlights how severe the correction has been and why the market is now looking for new directional signals.
Recovery Towards $87,000, but Market Structure Remains Fragile #
Although the price dropped towards $82,000 last week, bitcoin then bounced back to roughly $87,500. Analysts, however, primarily see a so-called “post-flush bounce”: a temporary recovery after major liquidations. Swissblock also sees cautious signs of stabilization. Selling pressure is easing, but according to the analysts’ models, convincing volume that confirms a definitive bottom is still missing. They emphasize that a second, milder sell-off often follows, which will only show whether the bulls have truly taken over.
Attack on New Price Record? #
Analyst Michaël van de Poppe expects the coming week to be decisive. If bitcoin climbs back into the zone between $90,000 and $96,000, the chance of a new attack on the all-time high increases significantly, according to him. But if the price remains stuck below those levels, a fall back towards $80,000 is back on the table. The bitcoin price is thus showing a neat recovery, but meanwhile the market structure is anything but stable. The futures market is winding down, liquidity remains thin, and traders are looking for confirmation that the bottom has truly been reached. Only when bitcoin can stay firmly above the important resistance zones can the market embrace the recovery with more confidence.