Bitcoin Open Interest Plummets $1B as Traders Retreat—Is $106K the Next Stop?

Futures markets just got a cold shower: Bitcoin open interest nosedived by a billion dollars as leveraged speculators hit the brakes. The question now isn''t if there''s blood in the water—it''s how deep the sharks will dive.

Price alert: With traders unwinding positions faster than a DeFi rug pull, technicals suggest $106K could be the next liquidity magnet. Cue the ''healthy correction'' spin from permabulls—right before they check their leveraged long positions.

Wall Street''s favorite volatility toy isn''t done surprising us. Whether this is a pit stop or a cliff edge depends on who''s holding the bag when the music stops.

Source: CryptoQuant

Notably, Bitcoin’s Open Interest has declined by a whopping $1 billion. Such a significant decline indicates a large scale position unwind and reduced leverage as investors strategically exited the market.

The drop in OI created a negative net taker volume, which reflects sellers dominance in the market, thus causing a pullback from $110k.

This seller dominance is also evident in Bitcoin’s Taker Buy Sell Ratio, which dipped to negative levels for the first time in four days.

Source: CryptoQuant

A negative Taker Buy Sell Ratio indicates that sellers have entered the market and are dominating. As such, Bitcoin’s spot CVD also remained positive, reflecting a high profit realization in the spot market.

Therefore, as bitcoin rallied to $110k, investors in the spot market turned to profit realization while those in the Futures market decided to reduce leverage.

Thus, traders on the spot exchanges are mostly selling, creating downward pressure on prices.

Source: Checkonchain

The same pattern was reflected in the exchange activity, which turned positive after a fall in recent days.

At press time, Bitcoin’s exchange netflow was 1.2k BTC, reflecting higher exchange inflows. This implies that most holders and investors are sending their coins into exchanges.

These conditions point towards caution in the market, as some investors feared another pullback.

Source: CryptoQuant

Is a pullback inevitable?

As observed above, some market participants took the recent price uptick as an opportunity to realize profits, while those in Futures are aggressively reduced their leverage.

After sellers entered the market, it created a downward pressure, resulting in a price retrace.

If the current conditions persist, the same pattern will continue, and there could be a further decline on price charts. A further retrace will see Bitcoin retest $107k support level, which has acted as a resistance previously.

A failure to hold above here will send BTC back to $106k, as predicted by Adler.

However, if bulls continue to eye a higher resistance, they could start buying again and absorb pressure arising from the Futures market. If they hold, the market will reclaim $110k and eye $112k once again.