Bitcoin has faced challenges in staying above $95,000 since December 28, with a noted decline in demand for leveraged positions. During this time, bulls experienced $470 million in liquidations, while bears reduced their appetite as Bitcoin traded below $92,000. The open interest in Bitcoin futures dropped to its lowest level in two months, suggesting limited downside potential for Bitcoin’s price. Despite bears gaining temporary control, the futures premium indicates continued bullish sentiment, currently standing at 15%, the highest since December 20, 2024. Optimism for Bitcoin buyers was supported by remarks from US Treasury Secretary Janet Yellen concerning a potential debt limit crisis. This fiscal uncertainty has implications for investors, leading to a complex market dynamic while Bitcoin ETFs are seen as a hedge. The current monthly funding rate for perpetual futures is 1.3%, indicating an overall improved sentiment among Bitcoin derivatives, despite the open interest decline, reinforcing bears’ lack of confidence below the $95,000 mark.

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