Bitcoin’s market has undergone a significant reset, with over $10 billion in open interest wiped out in just two months. This massive shake-up has led analysts to speculate that a recovery in Bitcoin’s price may be on the horizon.
According to a recent market analysis by CryptoQuant analyst Darkfost, Bitcoin’s open interest surged to a record high of $33 billion on January 17, indicating extreme leverage within the market. However, factors such as political uncertainty linked to former U.S. President Donald Trump’s recent actions triggered a cascade of liquidations, sending shockwaves through the market.
The $BTC market is deleveraging : A Natural Reset ?
On January 17th, Bitcoin's open interest reached an all-time high of over $33B, indicating that leverage in the market had never been this high.
Following the recent panic triggered by political instability linked to… pic.twitter.com/KPLQ63SHx3
— Darkfost (@Darkfost_Coc) March 16, 2025
From February 20 to March 4, Bitcoin experienced a sharp decline in open interest, with nearly $10 billion disappearing. As a result, Bitcoin’s 90-day futures open interest change dropped by 14%, a trend that frequently signals a market reset and sets the stage for potential price recoveries. Analysts note that purging excessive speculation can create a more stable foundation for future growth.
Despite the recent downturn, Bitcoin’s long-term outlook remains optimistic. Economist Timothy Peterson highlights that Bitcoin typically sees its largest seasonal gains in April and October. His latest analysis suggests that Bitcoin might reach new all-time highs before June, projecting a median target of $126,000.
Peterson’s “Lowest Price Forward” model, which estimates a price level Bitcoin is unlikely to drop below in future trading, suggests that the price floor has now risen to $69,000, with a strong 95% probability of holding. Historical trends indicate that significant corrections, like Bitcoin’s recent 30% pullback, are often precursors to robust rebounds.
However, the sentiment among analysts isn’t uniformly bullish. Benjamin Cowen, founder of Into The Cryptoverse, raised concerns during a Mar. 15 YouTube stream, warning that Bitcoin’s current bull cycle could be in jeopardy if it dips below 2024’s highs, specifically in the lower $70,000s. He drew parallels to the 2017 market, during which Bitcoin had to retest the prior year’s high for recovery.
Cowen further explained that a dip below the $70,000 to $73,000 range could threaten the market’s structure, causing Bitcoin to signal a macro lower high later in the year. This situation might lead to a more bearish outlook by the third quarter.
As it stands, Bitcoin is still navigating a critical consolidation phase, currently trading at $82,900. If historical patterns are any indication, this recent market reset could be a harbinger of a strong rally in the months to come.
