Concerns arise among Bitcoin (BTC) enthusiasts as institutional interest appears to be declining amidst softer demand for BTC futures. Nonetheless, other indicators suggest that the BTC price might hold above $85,000.
Key highlights:
BTC futures open interest dropped to $42B, an eight-month low, indicating a leverage flush instead of bearish positions.
Bitcoin options valuation reflects a stabilizing market sentiment.
BTC futures open interest reaches eight-month low
Bitcoin faced another setback after momentarily testing the $89,000 threshold on Friday. This unexpected shift led to the liquidation of over $260 million in leveraged BTC futures positions.
The aggregate BTC futures open interest across major exchanges fell from $47 billion to $42 billion on Friday, marking the lowest point in eight months. Despite this significant leverage drop, it doesn’t necessarily indicate a bearish trend, as longs and shorts naturally offset each other.
Investor apprehension grew following a five-day withdrawal from spot Bitcoin ETFs amounting to $825 million. Although this represents less than 1% of the total $116 billion in deposits, traders are worried that the bullish trend observed in October may be waning due to global economic uncertainties.
Precious metals rise amidst economic unease
Gold and silver surged to new all-time peaks on Friday as investors sought safety from escalating U.S. debt.
The demand for government-backed securities increased, causing yields on the US 10-year Treasury to fall to a three-week low of 4.12%. Part of the skepticism regarding U.S. monetary policy arises from mixed signals relating to import tariffs.
On Tuesday, President Donald Trump’s administration announced that tariffs on Chinese semiconductor imports would be postponed until June 2027.
Last week, the U.S. government lifted restrictions on Nvidia’s second-most powerful AI chips previously banned from export to China for national security reasons, according to Reuters.
Bitcoin’s basis rate recovers
The monthly futures premium for Bitcoin assists in determining whether market makers and whales are feeling bearish. Typically, BTC futures trade at a 5% to 10% annualized premium under neutral conditions, referred to as the basis rate, to account for the extended settlement period.
Considering Bitcoin’s struggles to reclaim the $90,000 level since October 12, some degree of pessimism, such as a lower basis, is expected.
However, the Bitcoin futures basis rate remained steady at 5% on Friday, unchanged from the previous week. Although slightly bearish, this metric is an improvement from the sub-4% levels noted on December 18 when Bitcoin traded below $85,000.
Simultaneously, the Bitcoin options market can provide insights into whether whales and market makers anticipate further price declines.
The delta skew indicates the pricing of put (sell) options in comparison to call (buy) options. When market sentiment weakens, this metric rises above the neutral 6% threshold, while bullish phases typically push it into negative territory.
Despite investor concerns stemming from indicators of a slowing economy, Bitcoin continues to behave like a high-risk asset, while precious metals have seen gains.
Related: Crypto ETFs expected to soar in 2026, say analysts
Nonetheless, the reduction in BTC futures and options open interest, alongside approximately 1% net outflows from Bitcoin ETFs, does not conclusively indicate a prolonged bear market, especially when Bitcoin options metrics and the basis rate remain robust.
While a retest of the $85,000 support level is plausible, bullish sentiment appears to be gradually rebuilding, even if Bitcoin does not surpass $90,000 shortly.
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