Will Bitcoin Comeback as Open Interest Recovers to $34B?

Here is why Bitcoin could see a slight recovery as open interest recovers despite recent price declines.

In the past 12 hours, panic selling triggered by growing economic fears surrounding President Trump’s controversial tariffs has sharply impacted Bitcoin (BTC) and altcoins. 

As the market reacts to these developments, Bitcoin’s market cap has dropped to $1.5 trillion, despite a slight recovery in its price to $77,000. Meanwhile, Bitcoin’s dominance in the market has surged to 60.7%, leaving altcoins facing more severe losses.

BTC Futures Market Experiences Declining Interest

The futures market has also felt the strain of Bitcoin’s price fluctuations. Data from Glassnode reveals that BTC futures open interest currently sits at $34.5 billion. While the metric saw a brief recovery from a low of $33.8 billion on April 3, the overall downtrend persists. Traders have continued unwinding their futures exposure as a response to the decreasing momentum in Bitcoin’s price. 

$BTC futures open interest sits at $34.5B. While there was a brief recovery from the $33.8B low on April 3, the broader downtrend remains intact. Futures exposure continues to unwind as traders reduce risk in response to declining price momentum. pic.twitter.com/ZX06yOCtsA

— glassnode (@glassnode) April 7, 2025

Since March 25, both cash- and crypto-margined open interest (OI) have shown significant drops. Cash-margined OI fell from $30.3 billion to $27.4 billion, while crypto-margined OI dropped from $7.5 billion to $6.9 billion. However, crypto-margined OI has started to increase, indicating renewed risk-taking by some speculative traders.

Meanwhile, the share of crypto-collateralized futures contracts in total OI has been rising. Currently, crypto-margined futures contracts make up 20.5% of total OI, up from 18.9% on April 5. This growing share could potentially increase the market’s sensitivity to price swings and amplify volatility, as more speculative positions become reflexive.

Liquidations Show Limited Leverage

Further, in the past 24 hours, Bitcoin futures liquidations have amounted to $58.8 million, with longs taking a more significant hit of $42.1 million compared to $16.6 million for shorts. 

Despite a 10% drop in Bitcoin’s price, this liquidation size is relatively modest. The data suggests that the market was not heavily leveraged on the long side, which helped prevent a cascade of liquidations. 

Long liquidations accounted for approximately 73% of total futures liquidations, signaling a mild bullish positioning within the market. 

Compared to earlier peaks in February and March, where daily liquidations exceeded $140 million, the current liquidations appear less intense. This indicates that the price decline has been orderly, largely driven by spot selling and de-risking rather than over-leveraged long positions being liquidated.

Institutional Demand Shows Modest Growth

Separately, data also highlights an increase in institutional demand for Bitcoin. Over the past two months, 76 new entities, each holding over 1,000 BTC, have entered the network. 

This surge represents a 4.6% increase in the number of large Bitcoin holders, suggesting that institutional interest in the asset is rising. If these new entities decide to accumulate more Bitcoin, it could further increase demand and potentially support a price recovery.