Bitcoin News Today: Traders Deleveraging Amid Volatility Sparks Bitcoin's Open Interest Drop

Bitcoin's Open Interest has declined by approximately 8% in recent days, signaling a reduction in leveraged positions as traders deleverage amid heightened volatility. This drop, which follows a brief price surge to $125,000 before retreating to $122,000, reflects growing caution in the market. On-chain metrics further underscore this trend, with Spot Taker CVD (90-day) showing sustained seller dominance, indicating that short-term price direction is being driven by profit-taking and reduced buyer aggression. Analysts note that such patterns are common after sharp rallies and suggest the market is resetting risk appetite .

The NVT Golden Cross, a key indicator comparing Bitcoin's network value to transaction volume, has fallen to -1.24, a 59% decline from recent peaks. This suggests weakening transactional activity relative to market capitalization, a common sign of consolidation phases. Historical data shows that negative NVT readings often align with oversold conditions before eventual recoveries, though prolonged declines may indicate reduced on-chain strength . Similarly, Bitcoin's Price–DAA Divergence stands at -247%, highlighting a disconnect between price gains and active address growth. This divergence signals speculative-driven price action rather than organic adoption, increasing the likelihood of near-term consolidation .

Traders are also monitoring taker-sell pressure, which has dominated market activity in recent sessions. While this suppresses upward momentum, it also clears excess leverage, potentially setting the stage for a more sustainable advance once on-chain demand recovers. CryptoQuant analysts emphasize that such sell phases historically precede renewed bullish momentum, provided network fundamentals strengthen . However, the current environment remains fragile, with derivatives markets showing record open interest of $47.8 billion, raising concerns about potential liquidation cascades if prices slip below key support levels .

Despite these short-term risks, long-term fundamentals remain robust. Institutional demand, evidenced by record inflows into U.S. spot Bitcoin ETFs and declining exchange-held supply, continues to underpin Bitcoin's value proposition. Glassnode data reveals a 39% increase in entity-adjusted transfer volumes and a 11% rise in active addresses, suggesting growing utility for the network beyond speculative trading . Meanwhile, 91% of Bitcoin's circulating supply remains in profit, reducing the likelihood of mass capitulation and reinforcing a strong base for future rallies .

Market participants are advised to monitor on-chain recovery signals, including NVT Golden Cross normalization and improved DAA divergence, as well as Spot Taker behavior for signs of renewed buying conviction. While the immediate outlook favors consolidation, historical patterns suggest these phases often act as catalysts for sustained bullish momentum once fundamentals align . Investors should remain cautious, particularly around the $111,000 pivot level, where concentrated liquidation clusters could amplify volatility .

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Source: [1] Ambcrypto (https://ambcrypto.com/bitcoin-why-btc-faces-122k-test-after-8-open-interest-drop/)

[2] CryptoQuant (https://en.coinotag.com/bitcoin-could-see-short-term-consolidation-after-8-open-interest-drop-and-weak-on-chain-signals/)

[4] Bitcoin News Digest (https://bitcoinnewsdigest.substack.com/p/bitcoin-news-digest-october-6-2025)

[12] en.coinotag.com (https://en.coinotag.com/bitcoin-may-consolidate-as-taker-selling-nvt-weakness-and-111k-liquidation-clusters-raise-volatility-risk/)