Key Takeaways
Why is Bitcoin’s Open Interest declining despite price stability?
Open Interest dropped nearly 8% as traders closed leveraged positions, signaling growing caution and reduced market confidence.
What do the on-chain metrics suggest about Bitcoin’s next move?
Dominant taker selling, negative NVT, and –247% DAA divergence point to short-term consolidation before recovery.
Bitcoin’s [BTC] Open Interest (OI) on Binance has dropped nearly 8% within three days after peaking at $15.07 billion, signaling traders are cutting back leveraged positions amid heightened volatility.
BTC’s market cap dropped to approximately $13.88 billion after briefly surging to $125K before retreating to near $122K, at press time.
This shift signals fading enthusiasm after weeks of aggressive buying.
Such patterns are common after strong rallies and suggest that traders are turning cautious, favoring stability over risk as the market reacts to recent price momentum.
Spot Taker CVD hints…
Bitcoin’s Spot Taker CVD (90-day) shows strong Taker Sell dominance, confirming sellers currently control short-term price direction.
This reflects increased market-side sell activity and weakening buyer aggression. Typically, when selling dominates for prolonged periods, it suggests fading bullish conviction and limited spot demand.
However, this also clears excess leverage, allowing the market to reset.
The continued dominance of sellers implies that Bitcoin could face short-term price resistance, although a sudden shift in taker behavior could quickly reverse the current momentum.
NVT Golden Cross falls!
The NVT Golden Cross has fallen to –1.24, at press time, representing a steep 59% decline, signaling weakening transaction value relative to Bitcoin’s market capitalization. Such a dip typically suggests slowing network activity during consolidation phases.
Historically, negative NVT readings align with oversold or undervalued zones that precede eventual recoveries. However, persistent declines below this level often indicate reduced on-chain strength.
This metric, therefore, highlights a cooling sentiment across the network, showing that recent price growth lacks strong transactional backing from new inflows.
Bitcoin’s weak network validation
At the time of writing, Bitcoin’s Price–DAA Divergence sat around –247%, revealing that price gains are not supported by active address growth. This negative divergence indicates speculative-driven price action rather than organic user expansion.
Such divergences often precede local corrections when participation fails to confirm rallies. However, strong network recovery can quickly reverse this imbalance.
The deep DAA divergence suggests Bitcoin’s uptrend is losing fundamental strength, increasing the likelihood of near-term consolidation as traders await renewed on-chain activity.
Conclusively, declining OI, dominant taker selling, and weak network metrics suggest that Bitcoin is cooling after its recent surge.
However, historical patterns show such phases often act as reset points before renewed bullish momentum emerges.
