Bitcoin open interest has plunged over 31% from its 2025 peak, now stabilizing around $10 billion as analysts identify this decline as a critical bottoming formation that could propel BTC toward a $105,000 breakout.
The deleveraging phase, triggered by massive liquidations, has pushed open interest below its 180-day moving average while trading activity continues surging with spot volume approaching $60 billion.
On-chain analysis from Darkorst characterized 2025 as a year of unprecedented speculation, with Binance futures trading volumes alone exceeding $25 trillion.
Bitcoin’s open interest exploded to an all-time high above $15 billion on October 6, nearly tripling the $5.7 billion peak witnessed during the November 2021 bull run when Bitcoin reached its previous all-time high.
Market Reset Creates Foundation for Bullish Recovery
The October 10 market crash sparked a severe deleveraging event that purged excessive leverage from the system.
“This decline, amplified by massive liquidations, triggered a deleveraging phase, with OI falling below its 180-day moving average,” Darkorst explained.
Source: CryptoQuantThese deleveraging periods serve a vital function in market structure. “Historically, they have often marked significant bottoms, effectively resetting the market and creating a stronger base for a potential bullish recovery,” he noted.
Bitcoin has responded with a 3% rally over the past 24 hours, holding firmly above $95,000 while demonstrating renewed strength across both futures and spot markets.
The price action suggests the worst of the correction may be over.
Futures Positioning Signals First Major Shift Since October Peak
Macro analyst Axel identified a critical turning point in futures market positioning.
A composite index tracking open interest dynamics, funding rates, and long-short ratios across major exchanges shows the 30-day simple moving average climbing from 2.1 to 3.5, marking the first breakout above 3 since October 6, when Bitcoin rallied toward $125,000.
The daily positioning index surged to 24, entering bullish territory amid aggressive long accumulation.
Source: AdlerAMOpen interest grew 1.89% with positive taker delta and funding at 0.0045 as price jumped 4.58% to $95,358, pushing total open interest to $12.18 billion.
Market sentiment reached a local peak of 93.15% yesterday evening at $95,061 before cooling to 70%, still well above the neutral 50% threshold and the 30-day average of 62.9%.
This contrasts sharply with mid-December’s extreme bearish readings of 10-15% during the correction to $85,000, when positioning turned overwhelmingly negative.
Resistance Cluster at $105k Holds Key to ATH Attempt
Axel emphasized that sustained momentum requires the simple moving average to hold above 2 for one week, which would confirm the positioning shift and trigger a potential breakout above the psychological $100,000 barrier.
Crypto analyst Trader Mayne assessed the probability of a bullish recovery following Bitcoin’s breakout above two-month resistance at $94,000.
“If I had to handicap it, I’d say 70% chance of a lower high, 30% chance at new ATHs,” he stated.
However, he outlined a clear path forward if the bulls maintain control.
Holding comfortably above $94,000 would bring the next resistance cluster around $105,000 into focus, with a successful breach potentially launching Bitcoin back toward the $120,000 highs established earlier in the cycle.
Low Volatility Environment Points Toward Range Expansion
The Bitcoin Realized Volatility chart shows that the current market calm is approaching levels that historically precede significant price breakouts.
Current volatility readings sit near the lower distribution zones for this market cycle, comparable to compression periods that preceded major moves throughout Bitcoin’s trading history.
These compressed regimes rarely persist over extended timeframes. As supply-demand imbalances accumulate beneath the surface, markets characteristically break from consolidation into range expansion phases, aligning with analyst projections for a $105,000 breakout that could catalyze a strong start to the 2026 rally.
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