The Bitcoin market has undergone a significant reset, wiping out over $10 billion in open interest within two months. Analysts are now optimistic about a potential recovery in Bitcoin prices.
According to CryptoQuant analyst Darkfost’s recent market analysis shared on X, Bitcoin’s (BTC) open interest soared to a record $33 billion on January 17, indicating extreme leverage in the marketplace. However, political uncertainty linked to former U.S. President Donald Trump’s recent developments triggered a series of liquidations.
🔍 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
Following this, around $10 billion in open interest disappeared between February 20 and March 4. This dramatic decline resulted in a 90-day futures open interest change for Bitcoin of -14%, which often indicates market resets prior to price recoveries. Analysts suggest that by reducing excessive speculation, these phases create a more stable foundation for future growth.
Despite this decline, Bitcoin’s long-term prospects remain positive. Economist Timothy Peterson notes that April and October are typically when Bitcoin sees its most substantial seasonal gains. His latest analysis suggests that Bitcoin could achieve new all-time highs before June, with a median target set at $126,000.
Moreover, his “Lowest Price Forward” model, which predicts a price level that Bitcoin is unlikely to fall below in future trading, indicates that the price floor for Bitcoin has now increased to $69,000, with a 95% probability of being maintained. Historical bull markets have demonstrated that corrections, such as Bitcoin’s recent 30% pullback, often precede robust recoveries.
However, not all analysts share an entirely bullish outlook. Benjamin Cowen, founder of Into The Cryptoverse, cautioned during a YouTube stream on March 15 that Bitcoin’s bullish trend might be at risk if it dips below the 2024 highs, which are in the lower $70,000 range. Cowen compares the current cycle to the 2017 period when Bitcoin revisited the previous year’s high.
He posits that the bull market could end if Bitcoin settles in the low $60,000s. Cowen further emphasizes that remaining above the $70,000–$73,000 range is crucial for sustaining market structure. If Bitcoin falls below this point, it may signal a macro lower high later in the year, potentially leading to a bearish sentiment by Q3.
Currently, Bitcoin is in a vital consolidation phase, priced at $82,900 as of this report. If historical trends persist, this reset could pave the way for another significant rally in the upcoming months.
