After a period of volatility, Bitcoin is gradually regaining its footing following a sudden drop that saw prices dip to $101,000. This incident sent shockwaves through the derivatives market, resulting in significant liquidations and shaking trader confidence, making market sentiment quite precarious.
Recent data from CryptoQuant indicates that Bitcoin’s open interest variation plummeted to negative 25, marking its lowest point in 2025. This decline suggests that the market has been purged of excessive leverage, leaving analysts wondering if this indicates a potential rebound or the beginning of a more substantial price correction.
Alarming Trends in Bitcoin’s Open Interest
As reported by CryptoQuant, Bitcoin’s open interest variation has recently entered what can be described as the Extreme Fear zone. At this point, the open interest dipped to approximately negative 25 points, an unprecedented decline for this year.
This level mirrors prior instances during last year’s major downturns when open interest similarly hit negative 25. Notably, the last drop below this threshold occurred in the middle of 2023, raising concerns and triggering discussions about the market’s trajectory.
With the intense market capitulation witnessed as over-leveraged traders were eliminated during the price plunge to $101,000, this dramatic shift underscores a critical juncture for Bitcoin. Historical precedents show that moments of extreme pessimism can sometimes lead to renewed market strength as selling pressure diminishes.
Patterns from previous drops in open interest indicate that recovery often follows. Historically, when open interest has collapsed to such lows, Bitcoin price typically finds solid support and begins to bounce back in the subsequent weeks. This trend implies that periods of extreme deleveraging may serve as precursors to local or macro price recoveries.
Implications for Bitcoin’s Future
As the open interest declines typically accompany price decreases, it signals a wave of liquidations among long holders. A substantial drop in open interest indicates that many leveraged traders have already exited the market, potentially creating a cleaner and healthier environment for a rebound. Such indicators can be viewed as bullish signs for medium to long-term traders.
The chart illustrates that the last occurrence of negative 25 was in early April, coinciding with Bitcoin concluding a long correction and stabilizing around $76,300. Following that decline, Bitcoin experienced several months of rising prices that ultimately led to its breakthrough above $106,000, establishing new all-time highs.
Should a repeat performance be on the horizon, market analysts predict Bitcoin’s price could rise steadily by 40% to 50% over the next few months, potentially pushing it back above $150,000 by early 2026.
Currently, Bitcoin is trading at approximately $106,900, reflecting an increase of 1.4% in the last 24 hours, presenting a moment for cautious optimism among investors.
