Bitcoin’s open interest has sharply declined over the past month, a situation one analyst predicts could establish a solid bottom for a rebound. Currently, open interest in Bitcoin (BTC) has experienced its steepest 30-day decline, with a drop of approximately 1.3 million BTC, valued at about $114 billion, coinciding with Bitcoin’s price of $87,500, as noted by the analyst Darkfost on CryptoQuant.

The continued decrease in BTC prices has caused a wave of liquidations, compelling traders to either bolster their positions or modify their trading strategies, while many investors are pausing futures trading to limit their risk exposure.

“Historically, these cleansing phases have often been essential to forming a solid bottom and setting the stage for a renewed bullish trend. Deleveraging, forced closures of overly optimistic positions and a gradual decline in speculative exposure help rebalance the market.”

Darkfost emphasized that the last occurrence of such a rapid fall in open interest occurred during the 2022 bear market, underscoring the importance of the current market cleanup.

Bitcoin’s price has dwindled by 20% within the last month and has sunk over 30% from a peak above $126,000 reached two months ago in early October.

Prospects of a Bull Market with a Price Surge Above $90,000

Crypto analyst Michaël van de Poppe claimed that the upcoming week will be crucial for Bitcoin’s price and its potential for achieving a new all-time high. In a post on X, van de Poppe suggested that if BTC can rally and maintain a price between $90,000 and $96,000, the likelihood of an upward surge towards a new all-time high increases significantly.

“Fear and panic are max during the past days. Those are the best opportunities in the markets,” he remarked.