Bitcoin continues to experience downward momentum in the market, dipping below $80,000 on Sunday for the first time since the previous year.
Although there was a 4.1% recovery in the past 24 hours bringing it back to $79,825, Bitcoin is still down 26% from its peak of over $109,000 reached in January 2025. Market sentiment is mixed as investors are evaluating on-chain data, short-term volatility, and the overall macroeconomic landscape.
Bitcoin Open Interest Indicates Cautious Sentiment
The open interest metric for Bitcoin has shown cautious behavior among leveraged traders. CryptoQuant analyst Maartunn noted a 17.8% decrease in Bitcoin open interest over the past week.
This decline signifies a notable reduction in outstanding derivative contracts, potentially reflecting investor hesitation in light of recent price fluctuations.
Historically, sharp reductions in open interest have often preceded major market rebounds, suggesting that speculative leverage is being eliminated from the system.
With the leverage reset, market participants may begin to re-enter positions, particularly if prices establish a robust support level or if whale accumulation signals renewed bullish behavior.
Bitcoin Open Interest decreased by -17.8%
This occurred over the past 7 days, resulting in billions in leveraged positions being removed.
Over the past 2 years, such flush-outs have often paved the way for significant buying opportunities.
pic.twitter.com/wXIxSXr7Nz
Accumulation Trends Indicate Long-Term Confidence
In parallel, there is a marked trend among long-term holders and whales. According to on-chain data shared by CryptoQuant contributor Onchained, a significant number of accumulating addresses have been purchasing Bitcoin aggressively, even as the asset surged to new highs.
This group’s realized capitalization has skyrocketed from around $20 billion in 2023 to $160 billion in 2025, with the BTC supply held by these entities increasing from approximately 800,000 to 3 million BTC.
This behavior indicates that instead of backing off during price surges, significant holders have markedly intensified their buying efforts, demonstrating strong conviction. The analyst noted:
This suggests that the average acquisition cost per Bitcoin for accumulating addresses increased considerably, yet the rate of accumulation accelerated rather than decelerated. This serves as compelling evidence of high-conviction purchases regardless of price hikes.
Onchained also observed an expanding divide between retail and whale realized capitalization, highlighting the growing influence of high-capital investors in market dynamics.
These whale wallets, which are typically less responsive to short-term market changes, continue to withdraw BTC from circulation, a trend that may contribute to future supply constraints.
Onchained’s analysis further emphasizes three critical implications: increasing supply-side pressure as more BTC is directed into inactive wallets, unwavering conviction from holders throughout all market phases, and the potential for forthcoming supply shocks as long-term accumulation persists.
Featured image created with Dall-E, Chart from TradingView
