Bitcoin is at a crucial juncture once again, having dipped below the $100,000 mark briefly on Tuesday, testing a key psychological and structural support level. The market is tense as bulls strive to maintain this zone amidst increased volatility and ongoing selling pressure. Momentum has notably slowed, leading traders to seek signs of stabilization as the market prepares for its next directional move.
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Top analyst Darkfost indicates that significant changes are occurring beneath the surface — Bitcoin’s open interest on major centralized exchanges is struggling to rebound. Following the mass liquidation event on October 10, which wiped out over $10 billion in leveraged positions, the use of leverage has markedly declined. This has led to the largest 30-day drop in open interest for the entire cycle, signaling a widespread de-risking among futures traders.
While this sharp decline reflects a loss of confidence, it may have a constructive role. Unwinding excessive leverage often precedes healthier, more sustainable price movements, helping to eliminate speculation and establish a stronger market foundation.
Leverage Flush Deepens as Exchanges See Billions in Open Interest Wiped Out
Darkfost highlights that Binance is at the forefront of this leverage unwinding, experiencing a significant $4 billion drop in Bitcoin open interest over the past month. Other major exchanges, such as Bybit and Gate.io, have also seen notable losses of over $3 billion and $2 billion respectively. This widespread reduction highlights the aggressive removal of leverage from the market following October’s liquidation shock.
On October 10, global open interest fell by excess of $10 billion in just a few hours, marking one of the most drastic resets of leverage in this cycle. Typically, after such significant events, traders quickly rebuild positions as volatility decreases. However, this time, the anticipated rebound has been noticeably absent — open interest remains low, indicating ongoing market fragility.
Bitcoin Retests Key Support After Heavy Selling
Bitcoin is starting to show signs of recovery after a significant sell-off that briefly drove prices below the critical $100,000 threshold earlier this week. Currently, BTC is trading around $103,000, making attempts to rebound but facing continued resistance from short-term moving averages.
The chart indicates that Bitcoin is trading significantly below the 50-day (blue) and 100-day (green) moving averages, both of which are acting as resistance zones around $110,000. The crucial support level is the 200-day MA (red) sitting near $102,000; closing below this could lead to further declines towards $95,000.
While the recent uptick reflects some short-covering and dip-buying, momentum remains weak. The market structure appears to have shifted from bullish to corrective, as lower highs are consistently forming. For bulls to regain control, Bitcoin must reclaim the $110,000–$112,000 region, where heavy liquidity and previous breakdown levels align.
Attention is on whether buyers can sustain the $100K–$103K zone. A failure to hold this range may trigger another round of liquidations, while successfully defending it could lay the groundwork for a mid-term recovery rally. The market atmosphere remains fragile, with sentiment still cautious.
