Bitcoin price may be gearing for a rebound with a cleaner setup after prolonged leverage wipeout.
Summary
- Bitcoin trades nearย $87Kย after a major leverage flush that cleared out excessive long positions.
- CryptoQuant analysts say fear, oversold readings, and reduced open interest could support a slow recovery.
- The chart still leans bearish with downward-sloping averages and weak momentum.
Bitcoin was trading near $86,646 at press time, up 0.6% in the last 24 hours. The daily range sat between $85,483 and $87,995. The coin remains down 10% over the past week after a 31% pullback from the $126,080 all-time high set on Oct. 6.
Trading volume climbed to $64.7 billion in the last 24 hours, a 46% increase, showing a short burst of activity after days of heavy selling.
CoinGlass data shows that derivatives volume rose 35% to $93 billion, while open interest increased 0.64%. Rising volume with slightly higher open interest often means traders are returning to the market after a liquidation flush, but positioning is still cautious.
Open interest drop may mark price reversal
A Nov. 21 analysis by CryptoQuant contributor Darkfost points to a major structural shift in derivatives. He noted that Bitcoinโs (BTC) open interest, measured in BTC, is showing its strongest 30-day drop of the entire cycle, with Binance alone losing roughly 1.3 million BTC in open contracts.
Darkfost said this type of decline โhas not appeared since the 2022 bear market,โ adding that the current cleanup is โfar more meaningful than many traders admit.โ
He noted that the market had been heavily driven by leveraged positions, with total open interest reaching an all-time high near $47.5 billion earlier in the cycle. He described the ongoing cleanup as a natural reset after a long period of speculative positioning.
Another CryptoQuant analyst, gigisulivan, pointed to a drop in the short-term SOPR under 0.94, which they said has been a reliable sign of local bottoms this year. They also highlighted oversold readings on the three-day and daily timeframes along with extreme fear in sentiment.ย
They expect Bitcoin to recover toward the $99,000 to $105,000 range before meeting stronger resistance, although they warned that fast moves above $100,000 often encourage premature bullish narratives.
Their outlook suggests that price could move between $78,000 and $105,000 for several months before the market finds a clearer direction.
Bitcoin price technical analysis
Bitcoinโs chart displays a clear downward trend from late October into November, with lower highs and lower lows creating a clear descending structure. The price is still close to the lower Bollinger Band, which indicates ongoing weakness rather than a steady base.
Candles remain below the 20-day and 50-day moving averages, both of which slope downward and confirm steady bearish pressure.
Momentum readings are showing mixed signs. There is still no obvious sign of a reversal even though the relative strength index is in deep oversold territory at 29. Stochastic is low but not turning up with strength.
An elevated average directional index indicates a strong trend that hasnโt yet weakened enough to show a change in direction. The MACD and awesome oscillator are negative, which shows that buyers have not yet regained traction.
Support sits in the region around the mid-$80,000 zone. If buyers fail to defend that area the market may retest levels closer to $80,000. Resistance is located near the $90,000 region and then the psychological $100,000 zone.
