The 7-day moving average of the Bitcoin [BTC] Open Interest has fallen below the 365-day OI moving average, even though the leading crypto has been trending higher since August.
This OI drop was the second time since the 25th of August. The price action in the first half of September encouraged market participants to enter the derivatives market in greater numbers and pushed the OI higher to signal greater speculative appetite.
This bullish, risk-on attitude was quickly muted. By the end of September, the 7DMA was below the 365DMA of the BTC OI once again, similar to the drop in OI in October 2025, when the bull market began its retreat.
Spot ETF outflows threaten Bitcoin sentiment
Institutional crypto sell-offs during what was expected to be an “Uptober” continued to be the theme of the market. Crypto spot ETF flows posted another round of outflows measuring $434 million, AMBCrypto reported.
In a post on X, crypto analyst Axel Adler Jr. observed that Bitcoin spot ETF flows recorded net outflows for the second week in a row. However, the 30-day flows were still net positive at +15.4k BTC.
The week ending on the 9th of October posted $678.9 million in outflows. By comparison, last week’s outflows were a more modest $228.4 million, underlining easing outflows.
Meanwhile, inflows were also shrinking to show reduced demand. Market participants maintained a cautious outlook, as the OI and spot ETF flows data showed.
The challenges ahead for a Bitcoin recovery
In a post on CryptoQuant, XWIN Japan highlighted the signs that a Bitcoin base was building for a recovery, but this base was shaky. The exchange Bitcoin reserves saw a rebound in October but were still low compared to the start of the year.
Spot demand recovery has also stalled. After approaching the zero line earlier in October, spot demand has continued its negative trend again, showing weak demand. Positive futures demand supported the total demand.
A broad base of ETF inflows and recovery in spot demand alongside accumulation trends among holders is needed for a durable Bitcoin recovery.
Final Summary
- The Bitcoin Open Interest 7-day moving average fell below its 365-day moving average earlier in October to show cautious speculative interest.
- Spot and Futures demand trends showed spot demand was weakening once again, threatening a Bitcoin recovery.
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