Bitcoin’s market is undergoing a significant reset, with over $10 billion in open interest wiped out in just two months. This major market shift has analysts predicting that a Bitcoin price recovery may be on the horizon.
According to CryptoQuant analyst Darkfost’s latest report on X, Bitcoin’s open interest hit a record $33 billion on January 17, signaling that the market was heavily leveraged. However, political uncertainty surrounding former U.S. President Donald Trump’s actions triggered a wave of liquidations, leading to a dramatic $10 billion decline in open interest between February 20 and March 4. This sharp downturn has caused Bitcoin’s 90-day futures open interest change to drop by 14%, often indicating a market reset before a price recovery.
While some analysts are hopeful for a rebound, others remain cautious. Bitcoin’s long-term outlook remains positive despite the recent pullback. Economist Timothy Peterson points to historical trends where Bitcoin tends to experience its largest gains in April and October. Peterson suggests that Bitcoin could hit new all-time highs before June, with a median target of $126,000. Additionally, his “Lowest Price Forward” model, which estimates the price level Bitcoin is unlikely to fall below in future trading, now indicates that the price floor has risen to $69,000, with a 95% chance of holding.
Past market behavior has shown that corrections, such as Bitcoin’s recent 30% pullback, often precede strong recoveries. Peterson believes that Bitcoin could see significant upward movement soon, possibly hitting $126,000 by mid-year.
However, not all experts share the same optimism. Benjamin Cowen, founder of Into The Cryptoverse, expressed concern on a March 15 YouTube stream that Bitcoin’s bull cycle could be at risk if it falls below its 2024 highs, which are in the lower $70,000s. Cowen draws parallels to Bitcoin’s behavior in 2017 when it retested the previous year’s highs. If Bitcoin drops below $70,000, he warns, it could signal the end of the current bull market, leading to a more bearish outlook by the third quarter.
Bitcoin is still in a crucial consolidation phase, with its price hovering around $82,900 at the time of writing. If past trends hold true, this reset could set the stage for another strong rally in the coming months. Whether Bitcoin manages to regain its bullish momentum or faces further challenges will depend on its ability to maintain its price above key support levels in the near future.
Related topics:
Binance Secures $2 Billion Investment from Abu Dhabi’s MGX
Cathie Wood’s Ark Invest Expands Bitcoin Holdings With $80M Buy
