9h00 ▪
3
min reading ▪ by
Fenelon L.
The crypto market is showing encouraging signs as bitcoin open interest hits a two-month low, suggesting a reduction in selling pressure. This development occurs in a context where BTC has been hovering around $95,000 since the end of December 2024.
Bearish traders retreat in the face of BTC resilience
On December 28, 2024, the bitcoin market experienced a series of massive liquidations totaling $470 million, primarily on the long side.
Futures open interest has fallen 11% since its December 20 peak, from 668,100 BTC to 595,700 BTC. Paradoxically, this drop in activity by bearish traders suggests limited confidence in their ability to push prices lower.
The futures premium reflects this dynamic, with a rapid rebound above 10% after briefly touching 9.5% at the end of December. Even more telling, this premium now stands at 15%, its highest level since December 20, signaling renewed confidence from bullish investors.
The perpetual futures funding rate, a key indicator of retail trader sentiment, remains at 1.3% monthly, its highest level in more than two weeks, while remaining in a zone considered neutral.
The US budget impasse reinforces the appeal of Bitcoin as a safe haven
Janet Yellen’s warning regarding the US debt ceiling, which could be reached as early as January 14, paradoxically creates a favorable context for bitcoin. The political blockage around raising the debt ceiling, exacerbated by opposition from some Republicans, reinforces the appeal of bitcoin as a safe haven.
The growing presence of Bitcoin ETFs, now representing $105 billion in assets under management, is helping to establish crypto as a credible alternative to traditional assets during times of economic uncertainty. This institutionalization of the market brings increased stability, despite short-term volatility.
In conclusion, the current market configuration, characterized by a disengagement from bearish positions below $95,000 and encouraging technical indicators, suggests bullish potential for bitcoin. American political uncertainty could paradoxically reinforce its status as a safe haven asset.
Maximize your Cointribune experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
Fenelon L.
Passionate about Bitcoin, I like to explore the intricacies of blockchain and cryptos and I share my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
