Bitcoin continues to consolidate below the $105,000 mark, maintaining stability above the key $100,000 support level despite continued market uncertainty. Bulls appear to be losing momentum, but sellers are showing signs of exhaustion as the price resists further decline. According to leading analyst Darkfost, the market has entered a clear deleveraging phase following the major liquidation event on October 10 – a structural reset that is removing excessive leverage from the system.
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The data shows that open interest – the total value of active futures contracts – has fallen 21% over the past 90 days, marking one of the steepest declines of the cycle. This decline reflects traders reducing risk exposure and liquidations steadily offsetting over-leveraged positions.
Darkfost notes that the use of leverage is gradually cooling, with the current decline echoing previous cleanup phases observed in September 2024 and April 2025. Historically, such periods of forced liquidation have preceded new market strength as liquidity stabilizes and speculative excess subsides.
Deleveraging signals a potential turning point for Bitcoin
Darkfost explains that the current deleveraging phase bears striking similarities to previous corrective periods that ultimately paved the way for major recoveries. During the September 2024 and April 2025 corrections, open interest fell by approximately 24% and 29%, respectively, enough to eliminate excessive speculation and restore balance to the market.
With the current 21% drop in open interest over the past three months, Bitcoin is now approaching those same historic levels of deleveraging. According to Darkfost these phases are not necessarily bearish; instead, they serve as a healthy reset during bull market cycles. By forcing over-indebted traders out and chilling speculative behavior, the market is able to rebuild itself on a stronger, more stable foundation.
In past cycles, such liquidation events were often followed by reversals once selling pressure eased and new demand emerged. Deleveraging also tends to attract long-term investors and institutions looking for low-risk entry points.
If Bitcoin continues to hold its position above $100,000 during this period of structural cleansing, it could signal that the worst of the correction is over, setting the stage for a potential new phase of momentum once confidence returns.
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BTC tests support as consolidation continues above $100,000
Bitcoin’s weekly chart shows BTC remaining in a tight consolidation range between $100,000 and $105,000, testing key structural support. The price has repeatedly defended the 100-day moving average (blue line), indicating that despite sustained selling pressure, buyers continue to intervene in this psychological zone.
The overall trend remains bullish on longer time frames, with the 200-week moving average (red line) trending higher and well below the current price movement – a sign that Bitcoin’s long-term market structure remains intact. However, momentum indicators reflect weakness, as BTC struggles to reclaim the $110,000 resistance level that limited previous rebound attempts.
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Trading volume has declined since the October liquidation event, in line with Darkfost’s observation that the market is experiencing deleveraging. This lower volume environment suggests hesitancy on the part of investors, but also indicates that forced selling may be close to exhaustion.
A decisive weekly close above $106,000 could confirm renewed bullish momentum, while a break below $100,000 could trigger deeper corrections towards $92,000, the next major support zone.
Featured image from ChatGPT, chart from TradingView.com