Bitcoin Advanced Sentiment Declines Amid Open Interest Drop, Suggesting Possible Price Pressure Ahead

• Bitcoin’s momentum shows signs of weakening as its Advanced Sentiment Index falls below neutral amid a $4.1 billion drop in Open Interest.

• Despite a recent price recovery, key indicators like Net Buy Volume and On-Balance Volume suggest diminishing bullish conviction in the market.

• According to COINOTAG sources, Bitcoin must surpass an OBV of -80K and sentiment above 65% to sustain gains beyond $107K; otherwise, a decline toward $101.5K is probable.

Bitcoin’s sentiment dips below neutral with a $4.1B Open Interest decline, signaling potential pullback risks amid low volume and fading bullish momentum.

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Bitcoin Sentiment Index Falls Below Neutral Threshold

The Bitcoin Advanced Sentiment Index has dropped sharply to 46.1%, falling beneath the neutral 50% mark after reaching highs above 80% just last week. This decline occurred even as Bitcoin’s price rebounded to approximately $106K, indicating a disconnect between price action and market sentiment.

This divergence is largely attributed to a significant contraction in Open Interest (OI), which plummeted from $37.8 billion to $33.7 billion, reflecting a $4.1 billion capital withdrawal. Such a reduction in OI typically signals traders are closing positions to mitigate risk, resulting in thinner liquidity and an increasingly bearish market environment.

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Source: CryptoQuant

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Declining Open Interest and Net Buy Volume Signal Reduced Market Confidence

Alongside the sentiment drop, Bitcoin’s Open Interest decline was accompanied by a dip in Net Buy Volume, with the Volume Delta hovering near zero. This suggests that capital inflows have slowed, and investors are adopting a cautious stance.

Moreover, Bitcoin’s On-Balance Volume (OBV) remains negative below the 100k mark, indicating insufficient buying pressure to support sustained price increases. This bearish volume trend reflects active selling, particularly among Long-Term Holders (LTHs), whose Spent Output Profit Ratio (SOPR) has surged to a monthly high, signaling increased profit-taking.

Source: CryptoQuant

Source: CryptoQuant

Potential Scenarios for Bitcoin Amidst Low Volume Conditions

Currently, Bitcoin is consolidating between $102K and $105K, with market activity subdued due to low trading volumes. For Bitcoin to break decisively above this range, a notable increase in volume is essential.

Specifically, the OBV must rise above -80K, and the Advanced Sentiment Index should exceed 65% to confirm renewed bullish momentum. This shift would likely coincide with stronger Net Taker Volume and an uptick in Open Interest, signaling increased trader confidence.

Absent these conditions, sellers may maintain dominance, increasing the probability of Bitcoin retesting support levels near $102K or potentially declining further toward $101,500.

Conclusion

Bitcoin’s recent price recovery masks underlying weakness in market sentiment and volume metrics. The drop in Open Interest and Net Buy Volume, coupled with negative OBV and increased selling by Long-Term Holders, suggests cautious investor behavior. To sustain upward momentum, Bitcoin must see a meaningful resurgence in volume and sentiment. Until then, traders should monitor these key indicators closely as they provide critical insights into Bitcoin’s near-term trajectory.