$55B in BTC Futures Positions Unwound in 30 Days: Will Bitcoin Recover?

Bitcoin's (BTC) struggle to hold above $70,000 until Wednesday has fueled fears that a fall to the $60,000 range could be the next stop. The sell-off is accompanied by futures market liquidity, a $55 billion drop in BTC open interest (OI) over the past 30 days, and rising Bitcoin inflows to exchanges.

The price weakness has analysts debating whether crypto-specific factors or larger macroeconomic issues are the driving factor behind the sell-off and what it means for BTC's short-term future.

Main Receptors:

744,000 BTC left major exchanges in open interest in 30 days, equivalent to $55 billion at current prices.

BTC Futures Cumulative Delta (CVD) has decreased by $40 billion in the last 6 months.

Crypto currency reserves have increased by 34,000 BTC since mid-January, which increases the risk of supply in the near future.

A fall in BTC open interest points to a large-scale transfer

CryptoQuant data revealed that Bitcoin's 30-day open interest volatility shows significant contraction on exchanges, reflecting not only newly opened short positions, but extensive position closings.

Net open interest on Binance decreased by 276,869 BTC last month. Bybit recorded the biggest drop at 330,828 BTC, while OKX saw a drop of 136,732 BTC on Tuesday.

In total, approximately 744,000 BTC worth of open positions were closed, which is more than $55 billion at current value. This fall in open positions coincided with Bitcoin's drop below $75,000, indicating that it was not just selling positions as a driving factor.

Onchain analyst Boris noted that Cumulative Volume Delta (CVD) data shows that market sell orders continue to dominate, especially on Binance, where CVD derivatives have settled near $-38 billion over the past six months.

Other exchanges showed mixed volatility: Baybit's CVD was flat around $100 million after December's liquidation wave, while HTX was flat on CVD-$200 million as the price rallied to $74,000.

Related: Bitcoin Rises to $76K, But Onchain and Technical Data Point to Deeper Fall

When analysts look at key levels, increased exchange flows increase pressure

Meanwhile, Bitcoin flows to exchanges increased in January, with a total of 756,000 BTC led by Binance and Coinbase. Since the beginning of February, the income has exceeded 137,000 BTC, which should change the position of traders and not necessarily exit the market.

On the supply side, analyst Axel Adler Jr. rose to 2.752 million BTC from 2.718 million BTC as of January 19. The analyst warned that further growth above 2.76 million BTC could increase selling pressure. The analyst believed that a full disclosure was yet to take place, which could happen at a lower price level.

According to market analyst Scient, Bitcoin is unlikely to make a bottom in a day or week. A durable market bottom may develop near the major support zones for two to three months, which is a high timeframe indicator. Scientist noted that it is not clear whether this structure will be in the upper $60,000 range or the lower $50,000 range.

Bitcoin trader Mark Cullen continues to see a downside towards $50,000 in light of the broader macro situation, but expects a short-term reversal to a local control point after BTC made a weekly low below $74,000 on Tuesday.

Related: Bitcoin's $68K Trend Line Appears as Potential BTC Price Floor: Traders