Key takeaways:
Bitcoin surged 4.5% in 48 hours, reaching $114,000.
A reset in BTC’s open interest suggests a healthier upside following a significant deleveraging.
A CME gap near $111,300 poses a short-term risk to bullish momentum.
Bitcoin (BTC) price increased by 4.5% in less than 48 hours, touching $114,000 on Monday. This resurgence came after a rapid drop last week from Monday to Saturday, where data indicated that the retreat was more about longs deleveraging than aggressive shorting, creating a more sustainable base for future gains.
Between Sept. 21 and Saturday, Bitcoin fell from $115,600 to $109,500, a 5.3% drop, alongside a 6.2% decline in futures open interest (OI) from $42.6 billion to $39.9 billion. The 30-day correlation between price and OI tightened to +0.46, indicating that longs were reducing exposure rather than shorts driving the downturn. Such resets often eliminate excess leverage, allowing for healthier price rallies.
Spot market dynamics are also showing improvement. Buyers are dominating centralized exchanges, with net 30-day flows in negative territory at roughly 170,000 BTC, signifying that more coins are exiting exchanges than entering. This trend is typically viewed as a sign of accumulation, reflecting decreased sell-side pressure.
Meanwhile, crypto market analyst Dom observed that the immediate target could be above $115,000. The analyst stated,
“The liquidation divergence has played out nicely. Spot books remain thin up until ~$115K on Binance. Thin books = easier to move price. Bulls need to stay active to achieve that.”
Funding rates have cooled to a neutral range, reducing the risk of cascading liquidations and instead supporting a gradual increase in leverage. However, a disconnect exists between the aggregated spot cumulative volume delta (CVD) and OI.
Spot CVD has remained mostly stable during Monday’s rally, while OI is steadily increasing. Should price stabilize above $113,000, late spot bids could enter the market, setting the ground for the anticipated “Uptober” rally.
Related: $300K Bitcoin target ‘becoming increasingly likely,’ analyst says
CME gap risk remains near $111,300
Even with Bitcoin breaking above $114,000, derivatives traders are likely monitoring a CME gap that remains unfulfilled between $111,300 and $110,900. CME gaps arise when Bitcoin futures on the Chicago Mercantile Exchange close for the weekend and reopen at a different price, creating a visible gap on charts. Historically, BTC has consistently returned to these levels, as all gaps since June have been fully closed.
This indicates that a short-term retreat towards the $111,000 area cannot be dismissed before the bullish rally resumes. The CME gap also aligns with a fair value gap, and a movement down to $111,000 would clear the internal liquidity block between $112,300 and $111,400.
Thus, a short-term drop near these levels is likely in the upcoming days. An immediate bullish invalidation would come with a strong daily close above $115,000, which could lower the chances of a decline to $111,000.
While historical trends stress that CME gap fills are not assured, the recent 100% closure rate makes it a crucial technical aspect for traders evaluating near-term risks within Bitcoin’s bullish outlook for Q4.
Related: BTC price poised for $108K ping pong: 5 things to know in Bitcoin this week
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
