Bitcoin's open interest, the largest cryptocurrency globally, is showing negative dynamics, indicating reduced trader activity with leveraged positions.
Decline in Open Interest
Bitcoin's 90-day open interest fell from $33.6 billion to $23.1 billion, a 31.2% reduction from its peak. This indicates cautious behavior among Bitcoin futures traders.
Rising Crypto Market Fear
Bitcoin is trading at $83,300, up 0.28% in the last 24 hours. However, pessimism still dominates the crypto market. The Crypto Fear and Greed Index dropped to 32/100, marking the 'fear' zone.
Historical Context and Current Situation
Past deleveraging phases often provided good short-term opportunities. Major deleveraging events last occurred before Bitcoin spot ETF approvals in January 2024 and during the late 2022 to early 2023 recession.
While the crypto market continues its downtrend, historical examples show that such phases can be auspicious for short-term investments.
