Open Interest Plummets: Has Market Sentiment Bottomed Out?
Recent on-chain data reveals that Bitcoin's futures open interest has dropped to its lowest level since 2022. This sharp decline indicates waning participation from leveraged traders and a broader shift toward market caution.
Bullish Clues Behind the Downtrend
Historically, such low levels in open interest have often preceded turning points. Similar patterns in 2020 and 2022 were followed by stabilization and strong upward moves. This suggests that after a period of pessimism and position unwinding, the groundwork for a recovery may be forming.
- Low open interest typically signals exit of speculative leverage
- Reduced volatility creates favorable conditions for new capital
- On-chain behavior shows declining selling pressure from long-term holders
Bitcoin has been testing key support without breaking down, showing resilience. A sustained hold, combined with rising volume, could pave the way for a meaningful upward move.