Bitcoin's Open Interest dropped by nearly 50% as institutions closed leveraged positions, causing the market to slow down and the price to trade sideways within a narrow range.
This trend typically occurs towards the end of the year, when investors tend to reduce risk and take profits before closing their books. As a result, activity in Futures, Spot, and even Bitcoin ETFs cools down, creating a defensive stance and a lack of short-term catalysts.
- Bitcoin's Open Interest (OI) has dropped sharply, reflecting actual position closures rather than just price fluctuations.
- Volume cooled on both CEX and Bitcoin ETFs, indicating a weakening level of market participation.
- BTC price is drifting below key moving Medium , RSI is low, and inflows are thin as investors await a new catalyst.
BTC activity decreased due to shrinking Open Interest.
Bitcoin's open interest (OI) has fallen by nearly 50% from its recent peak, indicating that leverage is being withdrawn from the market and trading is becoming more cautious as the year draws to a close.
Data from Alphractal showed that open interest (OI) has decreased sharply, nearly 50% from its recent peak. In notional value, over $30 billion in leveraged positions have been closed across multiple exchanges, consistent with the seasonal risk abatement.
Open interest (OI) was described as decreasing from over $70 billion to around $35–40 billion, while the price of Bitcoin remained relatively stable. This "cooling down" pattern is common at the end of the year, when Capital flows and risk tolerance levels gradually decrease rather than experiencing an immediate price shock.
In practice, institutional investors tend to reduce risk, take profits, and close positions before closing the books. When leverage is withdrawn from the system, activity can also slow down on Futures Contract , spot markets, and fund products, narrowing the range of price swings.
For Derivative Watcher open interest (OI), funding, and liquidation clusters helps differentiate between "downs due to position closures" and "downs due to price fluctuations." In situations requiring additional signals to assess risk levels and leverage behavior, traders can refer to market monitoring tools on BingX to supplement their perspective on perpetual contract volatility and liquidation.
Volume also cooled down on CEX and Bitcoin ETFs.
In mid-December, Bitcoin volume decreased significantly on centralized exchanges and Bitcoin ETFs, indicating weakening short-term trading demand as prices moved sideways.
Bitcoin volume on CEXs fell to around $191 billion , down from approximately $263 billion in the first half of November. In the ETF sector, volume also decreased to around $39 billion from over $50 billion a month earlier.
In summary, both exchange volume and ETF volume decrease when prices move sideways at the time of recording. This typically means lower participation, slower trading pace, and the market needs new catalysts to expand its range.
Binance remains a major liquidation hub, handling over $50 billion in volume, but the overall picture suggests a softening of order flow. When volume declines, the reliability of short-term breakouts tends to decrease, and support/resistance zones may be tested repeatedly.
Bitcoin price drifts below key moving Medium .
BTC has declined from its recent peak and is trading below short-term Medium , while low RSI and downward OBV indicate limited buying pressure and thin participation.
Bitcoin is currently trading around $86,400, down from near $92,000 in early December. This is a "drifting" state where the market lacks clear upward momentum, reflecting a simultaneous cooling of leverage and volume.
Technically, BTC is below key Medium , with the 50-day MA near $90,000, and the 100-day and 200-day MAs above $100,000. When the price is below these levels, the short-term momentum is generally XEM as weaker, and traders tend to wait for confirmation signals.
The daily RSI is near 38, indicating limited buying pressure. The OBV is also decreasing, reinforcing the view that inflows are thinning. In such a context, the market is often sensitive to new catalysts, and until a clear catalyst emerges, prices may continue to trade sideways or fluctuate cautiously.
Conclude
The end of the year is pushing Bitcoin into a defensive stance: Open interest (OI) has dropped by nearly 50%, and volume has decreased on both CEXs and Bitcoin ETFs. With leverage withdrawn and Volume weakening, the price is likely to trade sideways below key technical levels until a new catalyst emerges.
Frequently Asked Questions
What does it mean when Open Interest (OI) drops by nearly 50%?
A sharp decrease in open interest (OI) typically reflects the closing of Derivative positions, especially leveraged positions. In the context of this article, the decrease in OI is accompanied by information that many positions have been closed, suggesting a "leverage withdrawal" rather than simply price fluctuations.
Why does the Bitcoin market usually slow down at the end of the year?
Towards the end of the year, institutional investors typically reduce risk, take profits, and narrow their positions before closing out. As leverage and trading demand decrease, volume on Futures, Spots, and ETFs may weaken, leading to more sideways price movement.
What does the decrease in volume on CEX and Bitcoin ETFs mean for the price?
Decreased volume typically indicates lower participation and weaker momentum. When Volume is thin, breakouts may be less sustainable, and prices are more likely to fluctuate within a narrow range until a clear catalyst emerges.
What does an RSI close to 38 and a decreasing OBV suggest?
An RSI close to 38 reflects limited buying pressure and a weak short-term trend. A declining OBV indicates weakening volume-based accumulation, consistent with a cautious market environment awaiting new triggers.
