Bitcoin price forms a major risky pattern as futures open interest tumbles

Bitcoin price retreated for the second consecutive day as investors booked profits after it crossed the important $70,000 resistance level following the encouraging U.S. inflation report.

Summary

• Bitcoin price has formed a bearish pennant pattern on the daily chart.
• The futures open interest has continued falling in the past few months and is now at its lowest level since 2024.
• Spot Bitcoin ETFs have shed billions of dollars in assets in the past four months.

Bitcoin futures open interest has tumbled

Bitcoin (BTC) dropped to $68,500 on Monday, down from the weekend high of $70,800, and 45% below the all-time high of $126,300.

Third-party data show that Bitcoin’s demand has waned over the past few days, a trend that may continue this week due to today’s U.S. President’s Day holiday and the ongoing Chinese Lunar New Year, which runs through this week.

China is one of the most active countries in the crypto industry, even though Beijing banned these assets in 2020. As such, its liquidity is likely to be much lower than in previous weeks.

Data show that futures open interest has continued to fall, a sign that Bitcoin’s demand among investors is waning. The figure dropped to $43 billion on Monday, its lowest level since September 2024. It has tumbled from last year’s high of $95 billion, a sign that investors are using less leverage.

Bitcoin price also retreated as investors booked profits after it rallied in the past few days following the release of the US consumer inflation report on Friday. The report showed that the headline Consumer Price Index dropped to 2.4% in January, while the core inflation remained unchanged at 2.5%.

More data shows that spot Bitcoin ETF inflows have waned in the past few months. These funds have shed over $677 million in assets this month, the fourth consecutive month of losses. They have now shed over $6.8 billion in the last four months.

Looking ahead, Bitcoin price will react to the upcoming Federal Reserve minutes, which will provide more color about the last meeting. Also, some prominent Fed officials, such as Raphael Bostic, Michele Bowman, and Neel Kashkari, will speak this week, while the Supreme Court may issue its decision on Donald Trump’s tariffs on September 20th.

Bitcoin price prediction: Technical analysis 

The daily timeframe chart shows that Bitcoin price has retreated in the past few months and is now trading at $68,377. It has crashed below all moving averages, a sign that bears remain in control.

Bitcoin has also remained below the Supertrend indicator. It has also formed a bearish pennant pattern, consisting of a vertical line and a symmetrical triangle.

Therefore, the most likely scenario is a near-term bearish breakout, with the next key target the year-to-date low at $60,000.