Following a strong rally in April, BTC price entered its first significant correction phase. The asset fell from its all-time high of approximately $111,970 to below $105,000. This decline was notably influenced by increasing open positions in derivative markets. Bitfinex analysts reported that the liquidation of many long positions pressured prices downward. 

Bitcoin Options Open Interest Signals Rising Volatility

The recent two-week pullback has revealed a notable acceleration in short-term profit-taking in the crypto market. Market participants remain cautious about whether Bitcoin will resume its upward trend. Rising volatility has intensified uncertainties about the market’s direction. 

Moreover, open positions in Bitcoin perpetual futures have also increased rapidly, indicating investors’ preference for actively positioning against price movements. According to Bitfinex analysts, this concentration suggests deeper institutional participation and heightened market sensitivity to volatility. 

Bitfinex analysts stated: 

“The key point here is that the significant increase in derivative activities signals expanding institutional involvement. Coming after Bitcoin’s recent all-time highs, it shows market participants positioning themselves for increased volatility.” 

After the options expiry on May 29, open interest dropped to $39 billion but remains well above historical averages. High open interest especially highlights institutional investors turning to hedging strategies. 

Macro Factors and Profit Taking 

Meanwhile, rising U.S. Treasury yields, a strengthening dollar, and developments in trade policies triggered a broader risk-off sentiment in crypto markets. Pressure on Bitcoin intensified alongside these macro winds, with aggressive profit-taking accelerating the price drop. 

However, the Relative Unrealized Profit metric shows that investors on the network still hold above-average paper profits. This indicates that selling pressure is not yet exhausted and short-term volatility may continue. 

In summary, these data suggest that although the market structure remains strong, short-term turbulence potential is increasing. The sustainability of demand will be a critical factor in determining the price movement direction. 

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