Bitcoin’s Recovery Above $88K Raises Questions as Derivatives Activity Fuels Market Uncertainty

Bitcoin recovered in the past few weeks as it rose close to $89,000, reversing much of the loss triggered by US President Donald Trump’s unexpected “Liberation Day” declaration on April 2nd.

However, a recent spike in open interest has raised questions about the sustainability of the current market rally.

Weakness Ahead?

According to CryptoQuant’s latest analysis, there has been a notable surge in 24-hour Open Interest (OI), which marks the largest increase in recent times. Historically, price pumps driven by derivatives tend to lack sustainability.

The most significant OI spikes observed recently were around 16% and 15%. This echoed similar increases during a bullish phase in November/December 2024, when positive momentum in the spot market was amplified by aggressive derivatives trading.

However, current price movements have been comparatively muted, with only a 4.2% increase. This contrasts with past events, where price gains of 10% and 7% were seen. The subdued price action suggests that selling pressure remains considerable, which indicates that the current rally might not be as strong as previous ones.

CryptoQuant’s head of research, Julio Moreno, also revealed that challenges remain that Bitcoin’s price resistance may lie between $91,000 and $92,000, coinciding with the Trader’s On-chain Realized Price. According to Moreno’s analysis, the Trader’s Realized Price serves as support during bullish market conditions (when the bull score is above 60) and as resistance when market sentiment turns bearish (with a bull score below 40).

Currently, the market remains in the second scenario, indicating a bearish outlook, with the price facing significant resistance near the $91,000-$92,000 range.

Accumulation Continues

Despite a gloomy picture, Bitcoin’s Realized Capitalization (Realized Cap) recently hit a record $872.2 billion, which is indicative of market confidence and accumulation. Unlike market cap, Realized Cap reflects the price at which coins last moved, and thereby offers a clearer view of long-term investor sentiment.

This milestone suggests that more capital is flowing into Bitcoin, and investors appear to be holding rather than selling. This behavior aligns with an “accumulation” phase, where smart money quietly increases exposure.