Bitcoin has recently experienced a significant decline in open interest, dropping over 31% from its peak in 2025 and stabilizing around $10 billion. Analysts view this decrease as a potential critical bottoming formation, suggesting it could lead to a bullish breakout for Bitcoin toward the psychological barrier of $105,000.
This deleveraging phase has been propelled by substantial liquidations, resulting in open interest falling below its 180-day moving average. Despite this, trading activity remains robust, with spot volume nearing $60 billion. In on-chain analysis conducted by Darkorst, the year 2025 was noted to be characterized by unprecedented speculation, particularly in light of Binance futures trading volumes surpassing $25 trillion.
Historically, drops in open interest have marked significant market bottoms, allowing for a reset that creates a stronger foundation for future bullish recoveries. Darkorst emphasized the importance of these deleveraging periods, as they typically reset the market dynamics.
Following a recent market crash on October 10 that led to this deleveraging event, Bitcoin’s price has rallied by 3% over the past 24 hours, maintaining stability above $95,000. This surge suggests that the correction phase may be drawing to a close, with renewed strength observed across both futures and spot markets.
Macro analyst Axel has identified a crucial turning point in futures market positioning. A composite index that tracks open interest dynamics, funding rates, and long-short ratios has shown a growth in the 30-day simple moving average from 2.1 to 3.5, the first breakout above 3 since early October, when Bitcoin peaked at $125,000.
Amid aggressive long accumulation, the daily positioning index has surged into bullish territory, while open interest grew by 1.89%. As Bitcoin’s price jumped by 4.58% to $95,358, total open interest reached $12.18 billion. Market sentiment peaked locally at 93.15% before settling at 70%, reflecting a strong shift from the extreme bearish sentiment witnessed in mid-December.
For Bitcoin to maintain its momentum, it is essential for the simple moving average to remain above 2 for one week, which would pave the way for a potential breakout above $100,000. Crypto analyst Trader Mayne has assessed the probability of a bullish recovery at 70% for a lower high and 30% for new all-time highs. He outlined that maintaining stability above $94,000 would bring the next significant resistance cluster at around $105,000 into play.
The current low volatility environment suggests potential range expansion on the horizon. Current realized volatility levels are nearing historical lows that have often preceded substantial price movements. As supply-demand imbalances build beneath the surface, analysts anticipate that Bitcoin could break out from this consolidation phase, aligning with projections for a breakout around $105,000, potentially igniting a strong rally as 2026 unfolds.
