Open Interest and ETF Outflows: Why Bitcoin's Rally May Slow Down

The 7-day average open interest in Bitcoin (BTC) has fallen below the 365-day moving average, indicating cautious speculative interest. This decline occurred for the second time since August 25. In the first half of September, a price increase prompted participants to enter the derivatives market more actively, and open interest rose, signaling a greater appetite for risk. However, this sentiment quickly faded: by the end of September, the 7-day average fell below the 365-day average again, similar to October 2025, when the bull market began to retreat.

Institutional sales during the period anticipated as "Uptober" continued to set the tone for the market. Spot crypto ETFs once again showed an outflow of $434 million, reported AMBCrypto. In a post on X, analyst Axel Adler Jr. noted that net outflows from spot Bitcoin ETFs have been ongoing for the second consecutive week, but 30-day flows remain positive: +15.4k BTC. The week ending October 9 saw an outflow of $678.9 million; last week, a more modest $228.4 million, indicating that outflows were weakening. Inflows were also decreasing, reflecting reduced demand. Market participants remain cautious, as seen in both open interest and ETF flows.

In a post on CryptoQuant, XWIN Japan pointed to signs that Bitcoin is forming a base for recovery, although it is shaky. BTC reserves on exchanges increased in October but remain low relative to the beginning of the year. The recovery of spot demand also stalled: in early October, it approached the zero mark and then went negative again. Overall demand was supported by positive futures demand. For a sustainable recovery, a broad inflow into ETFs, a return of spot demand, and accumulation by holders are needed.