- Bitcoin surged from $74K to $112K, but rising open interest and stalled gains near $110K reveal potential leverage imbalance risks.
- April’s clean 42% rally came with balanced open interest, while May’s overheated move added 50% more OI for only 8% price growth.
- Trapped longs between $108K and $110K could pressure BTC unless open interest resets, restoring balance for the next bullish leg.
According to analyst Daan Crypto Trades, Bitcoin futures have entered a volatile phase between April and June 2025, revealing shifting market dynamics and leveraged imbalances. Price action surged from $74,000 in early April to a peak of $112,000 by mid-May. However, the latter part of May and early June introduced turbulent trading conditions, marked by increased open interest and slower price gains. Current market data shows BTCUSDT trading at $105,700 with a 0.42% daily increase. Despite bullish progress, the derivative market suggests growing risk exposure at higher levels, particularly between $108,000 and $110,000.
April to May Rally Brings Sharp Price Moves
April marked the start of a consistent uptrend for Bitcoin. The price broke through resistance at $85,000 by late April, gaining over 21,000 points. Consequently, bullish sentiment strengthened as Bitcoin surpassed the key $100,000 psychological barrier in May. Momentum carried the price to a mid-May high near $112,000. Moreover, futures volume surged as institutional players intensified their participation.
Source: Daan Crypto Trades
However, a critical difference emerged between the April and May rallies. In April’s green zone, Bitcoin gained 42% while adding 30K BTC in aggregated open interest. In contrast, the red zone in May saw a smaller 8% increase despite a larger 45K BTC open interest boost. Hence, the May rally showed signs of excessive leverage and aggressive long chasing.
Leverage Build-up Signals Imbalance
The sharp contrast between price movement and open interest indicates trapped long positions. These are concentrated between $108,000 and $110,000. Besides, the recent stall in price reflects these overleveraged positions. A reset in open interest could bring market balance and revive bullish momentum.
Technical indicators show Bitcoin maintaining higher lows. Strong support rests at $104,000 while resistance remains near $108,000. Moreover, the SMA 9 volume indicator signals sustained trader interest, with a recent average of 6,345K.
Market Outlook and Derivatives Trends
The futures market continues to reflect institutional growth and consistent professional involvement. However, market health now depends on the clearing of excess leverage. A quick drop in open interest to the baseline, near the white dotted line, could stabilize price action. Additionally, such a move would enhance Bitcoin’s short- to mid-term outlook.
