Will Bitcoin drop by 50% soon? Troubling signs emerge

Historical context

Historically, significant shifts in Open Interest have acted as leading indicators of market reversals.

During the late 2021 bull run, a sharp reduction in Open Interest coincided with institutional profit-taking, leading to a prolonged market correction.

Similarly, in mid-2023, large-scale position unwinding by institutions signaled caution at price peaks, triggering widespread sell-offs.

These adjustments often dampen market momentum, as institutional activity drives both liquidity and sentiment.

Current patterns of position closures on CME suggest a similar scenario, where profit-taking by larger players may weaken Bitcoin’s support, increasing the likelihood of a price retracement.

Potential risks and the road ahead

The current market environment signals significant risks for Bitcoin. With open interest deltas declining sharply, liquidity is drying up across key exchanges, leaving the market vulnerable to heightened volatility.

The reduced participation from both institutional and retail players creates a precarious situation where sudden price swings could intensify.

Read Bitcoin’s [BTC] Price Prediction 2025–2026

Additionally, the absence of strong buying pressure at higher price levels raises concerns about the sustainability of Bitcoin’s recent rally.

If the downward trend in open interest persists, Bitcoin may struggle to maintain its current price range, potentially triggering a deeper correction that could test critical support levels in the coming months.