In recent weeks, Bitcoin futures traders have significantly pulled back, leading to a $55 billion decline in open interest as Bitcoin struggles to maintain its value above $70,000. This downturn coincides with increasing Bitcoin inflows to exchanges and ongoing discussions among analysts about the potential causes and future implications for Bitcoin's price.
Over the past 30 days, approximately 744,000 BTC in open interest has been withdrawn from major exchanges, translating to a substantial $55 billion at current market prices. The cumulative volume delta (CVD) for BTC futures has decreased by $40 billion over the past six months, with crypto exchange reserves seeing an uptick of 34,000 BTC since mid-January, suggesting a heightened near-term supply risk.
Data from CryptoQuant indicates a significant contraction in Bitcoin's 30-day open interest across exchanges, pointing to widespread position closures. On Binance, net open interest dropped by 276,869 BTC over the past month. Bybit experienced the largest reduction of 330,828 BTC, while OKX saw a decrease of 136,732 BTC on a single day. This widespread closing of positions aligns with Bitcoin's dip below $75,000, suggesting that the market is undergoing a deleveraging phase.
Onchain analyst Boris highlighted that market sell orders continue to dominate, particularly on Binance, where derivatives CVD is nearing -$38 billion over the past half-year. Meanwhile, Bybit's CVD stabilized near $100 million following a sharp liquidation in December, and on HTX, CVD settled at -$200 million as Bitcoin's price consolidates near $74,000.
In January, Bitcoin inflows to exchanges surged to approximately 756,000 BTC, driven primarily by Binance and Coinbase. Since early February, inflows have surpassed 137,000 BTC, indicating traders are repositioning rather than exiting the market entirely.
On the supply side, analyst Axel Adler Jr. noted that exchange reserves increased to 2.752 million BTC from 2.718 million BTC since January 19. He cautioned that if reserve growth surpasses 2.76 million BTC, selling pressure could intensify. Adler suggested that a significant market capitulation has yet to occur, potentially taking place at lower price levels.
Market analyst Scient believes that Bitcoin is unlikely to establish a durable bottom in a short timeframe. Instead, a stable market bottom may require two to three months of consolidation around major support zones. Whether this consolidation will occur in the high $60,000s or the low $50,000s remains uncertain.
Bitcoin trader Mark Cullen anticipates potential downside toward $50,000 within a broader macroeconomic context. However, he expects a short-term rebound between $89,000 and $86,000 after Bitcoin dipped below $74,000 earlier this week.