Bitcoin bulls brace for recovery as over $10B in liquidations signal market reset

According to CryptoQuant analyst Darkforth, the latest open interest has reached a record $33 billion, indicating excessive leverage in the market. However, political uncertainty generated by the recent actions of former US President Donald Trump has led to a wave of liquidations.

Subsequently, about $10 billion of open interest disappeared between February 20 and March 4. This sharp decline resulted in a drop in open interest in 90-day Bitcoin futures by as much as -14%, which is often a sign of a market reset before a price correction. Analysts say that curbing excessive speculation will provide a more stable basis for future growth.

Bitcoin's long-term outlook remains bright despite the downturn. According to economist Timothy Peterson, Bitcoin's highest seasonal growth typically occurs in April and October. Peterson's latest analysis suggests that Bitcoin could reach new all-time highs before June, with an average target of $126,000.

Additionally, its floor price model, which estimates the price floor below which Bitcoin is unlikely to fall in future trades, shows that Bitcoin's price floor has now risen to $69,000, which has a 95% probability of holding. Past bull markets have shown that corrections, such as Bitcoin's recent 30% drop, often precede strong bounces.

Not all analysts are entirely optimistic, however. Into the Cryptoverse founder Benjamin Cowen warned in a YouTube stream on March 15 that if Bitcoin falls below its 2024 highs, which are in the low $70,000s, its bull cycle could be in danger. Cowen compares the current cycle to 2017, when Bitcoin retested last year's highs.

He suggests that the bull market could be over if Bitcoin closes below $60,000. Additionally, holding above $70,000-73,000 would keep the market structure secure, Cowen said. If Bitcoin falls below this level it could hit a macroeconomic bottom later this year, creating a more bearish scenario for the third quarter.

Bitcoin is still in a significant consolidation phase, with its current price at $82,900 at the time of publication. If past trends continue, this retracement could pave the way for another strong bullish move in the coming months.